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

Bits, What is the largest number (in decimal) that can be made with 6 bits?...

What is the largest number (in decimal) that can be made with 6 bits?

Find the value of given equations in polynomial , If α & ß are the zeroes ...

If α & ß are the zeroes of the polynomial 2x 2 - 4x + 5, then find the value of a.α 2 + ß 2   b. 1/ α + 1/ ß  c. (α - ß) 2 d. 1/α 2 + 1/ß 2    e.  α 3 + ß 3 (Ans:-1, 4/5 ,-6,

Application of probability in business, Application of Probability in Busin...

Application of Probability in Business 1. Business games of chance for illustration, Raffles Lotteries. 2. Insurance firms: this is generally done when a new client or prop

Triangles, The sides of a triangle are x^(2 )+x+1, 2x+1,x^2-1, prove that t...

The sides of a triangle are x^(2 )+x+1, 2x+1,x^2-1, prove that the largest angle is 120 degrees, and find range of x. Ans) The biggest side is x^(2) + x + 1 so findout the angl

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