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From the following asset allocation, select the one allocation the best serves the need of the endowment fund and justify its selection by maximizing the
- From the following asset allocation, select the one allocation the best serves the need of the endowment fund and justify its selection by maximizing the three criteria simultaneously and also considering Liquidity in your final decision
- Return objective (4 marks)
- Efficiency (4 marks)
- Diversification (4 marks)
|
| PORTFOLIO | |||
|
| A | B | C | D |
| EXPECTED RETURN | 8.8% | 8.5% | 7.9% | 7.8% |
| LIQUIDITY | 5.2% | 5.7% | 4.5% | 4.3% |
| SHARE RATIO | 0.27 | 0.20 | 0.21 | 0.26 |
| CORRELATION OLD & NEW | -0.2 | +0.2 | +0.2 | -0.2 |
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Intermediate Financial Management
Authors: Brigham, Daves
10th Edition
