Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Choose 5 ETFs with a minimum of ten years of performance data from Yahoo Finance. One of these ETFs must be VTI ( Vanguard Total

Choose 5 ETFs with a minimum of ten years of performance data from Yahoo Finance. One of these ETFs must be VTI (Vanguard Total Stock Market ETF) or a similar benchmark. Aim for maximum diversification in your selection, covering different sectors and asset classes. In addition to VTI as your portfolio's 'Anchor', include:
A 'Diversifier': Select an asset class that is uncorrelated with VTI, such as commodities, alternative investments, or private equity.
A 'Counterbalance': Include ETFs that represent various bonds (government, corporate, foreign, or municipal) to stabilize your portfolio's returns.
A 'Booster': Choose ETFs focusing on high-growth industries like AI, semiconductors, biotechnology, or green technology to potentially enhance your portfolio's growth.
After selecting your ETFs, prepare the following three tables:
TABLE 1: a single table showing the following information for each of your ETF:
ETF Ticker
Monthly return statistics (arithmetic and geometric averages, standard deviation)
Current value of $1,000 IF invested 20 years ago
All values in the table should LINK back to the original raw data you downloaded from Yahoo! Finance.
Betas (relative to VTI)- to indicate each ETF's contribution to your portfolio's overall volatility. TABLE 2: Variance Covariance Matrix to show diversification benefits of each ETF.
TABLE 3: Correlation Matrix - make sure that no correlation is above 95%(ideally, all correlations should be as low as possible - to derive the maximum diversification benefits.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Routledge Handbook Of Integrated Reporting

Authors: Charl De Villiers, Warren Maroun, Pei-Chi Hsiao

1st Edition

0367233851, 978-0367233853

More Books

Students also viewed these Finance questions