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Going further into the previous question... You have been asked to recommend a course of action regarding a portfolio investment in which all 3 funds
Going further into the previous question...
You have been asked to recommend a course of action regarding a portfolio investment in which all 3 funds are equally weighted. The scenario is as below:
Scenario Probability Rate of return Fund A Fund B Fund C
Boom 30% -7% 16% 10%
Normal 50% 12% 7% 6%
Recession 20% 26% -3% 4%
Fund D is being analyzed. Using the same scenarios the expected returns for D are 13%, 9%, -2%. If they buy Fund D, which fund should they sell?
What will be the new portfolio return?
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