Management, Mathematics

Assignment Help:
An investment manager at TD Ameritrade is making a decision about a $10,000,000 investment. There are four portfolio options available and she is looking at annual return of these portfolios to choose one. Market has four possible situations: bad, average, good, and excellent. Each portfolio may have a different estimated rate of return under a known market situation. For “Bad”, “Average”, “Good”, and “Excellent” market, “Option 1” has return rates of 33%, 28%, 1%, and loss of 15% respectively. These numbers are 22%, 12%, 17%, and loss of 5% for “Option 2”, 8%, 9%, 14%, and 16% for “Option 3”, and finally for “Option 4” these rates are loss of 2%, 5%, 12%, and 35% under “Bad”, “Average”, “Good”, and “Excellent” market situations.
a. Compare the outcomes for all portfolios under any market situation. What is the best portfolio under Minimax Regret rule?
b. Does the outcome change if the investment decision was made based on the expected value of portfolios? Why? Probabilities for bad, average, good, and excellent market situations are 35%, 22%, 25%, and 18% respectively.


Related Discussions:- Management

The expected monetary value method, The expected monetary value method ...

The expected monetary value method The expected pay off as profit associated with a described combination of act and event is acquired by multiplying the pay off for that act a

Determine the solution to the differential equation, Determine the solution...

Determine the solution to the subsequent differential equation. dv/dt = 9.8 - 0.196v Solution Initially we require finding out the differential equation in the accurate

Fractions Word Problem, 1/8 of the passengers of a train were children.If t...

1/8 of the passengers of a train were children.If there were 40 children travelling in the train on a certain day,how many adults were there in that train that day?

Triangle, in triangle abc ab=ac and d is a point on side ac such that bc*bc...

in triangle abc ab=ac and d is a point on side ac such that bc*bc=ac*cd. prove that bc=bd

Find the probability of drawing a diamond card, Find the probability of dra...

Find the probability of drawing a diamond card in each of the two consecutive draws from a well shuffled pack of cards, if the card drawn is not replaced after the first draw

Evaluate this integral value, The base of a right cylinder is the circle in...

The base of a right cylinder is the circle in the xy -plane with centre O and radius 3 units. A wedge is obtained by cutting this cylinder with the plane through the y -axis in

Derivative, Uses of derivative in daily life with examples.

Uses of derivative in daily life with examples.

Constructions, Draw a line segment AB of length 4.4cm. Taking A as centre, ...

Draw a line segment AB of length 4.4cm. Taking A as centre, draw a circle of radius. 2cm and taking B as centre, draw another circle of radius 2.2cm. Construct tangents to each cir

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd