Question
As a finance professional, you are trying to establish a strategic asset allocation for your two clients Joe and Bill. Joe has a risk-tolerance factor
As a finance professional, you are trying to establish a strategic asset allocation for your two clients Joe and Bill. Joe has a risk-tolerance factor of 15, while Bill has risk-tolerance factor of 30. The features of the four portfolios to consider are as follows:
Portfolio Stock Bond Expected Return (ER) Risk (variance)
1 10% 90% 9% 10%
2 25 75 11 13
3 60 40 13 18
4 100 0 18 26
Which portfolio represents the strategic optimal asset allocation for Joe and Bill, respectively?
| Portfolio 3 for Joe, Port. 4 for Joe | ||
| Portfolio 4 for both Joe and Bill | ||
| Portfolio 3 for both Joe and Bill | ||
| Portfolio 4 for Joe, Portfolio 3 for Bill |
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
9781285586618
