information on two assets, X & Y, is below. Portfolios A through K have been constructed by varying the weights of Asset X and Asset Y, and the Expected Return and Standard Deviation is given for each.
a) Plot the portfolios on a graph (SD on x-axis & ER on y-axis) and label:
I. Minimum variance portfolio (MVP)
II. Inefficient portfolios III. Efficient Portfolios.
b) As a risk averse investor (want to minimize risk), which portfolio(s) would you choose? Briefly explain. (2 marks)
c) As an investor who is prepared to take on more risk (more tolerance for risk), which portfolio(s) would you choose? Briefly explain.
which Problemas Information on wees. X&Y below. Forcare the weights of use and stand the speed and standard. Der al Plot the portion on a prays and Minimun wone port relict portfolio Iman merk Ruum SEN 160 SOS BON TON 10 JE DODON 0.00 10 DON 30.00 20. 70 DON 60.000 0.00 DON 40.00 GODON 20.00 70 ON NODON 10.00 SO DON . jo 220 130 Winter 2001 Aignent 2 Problem 12/30 marty You love been pen the following incompleted and the title comprender a amar Data Rati wegen Autosole Beta Portfolio 1 os Porto 1965 105 Pontos 123 Port 3 02 Problem 315 mars You are flowing cocks and data recomendous odor to your customers. The market returns with a devine Theme CARMS Expected andard Dee's Best Aline BE 110 Canter Code DE 103 335 Start your recommendation was for a show your handlated Security Market Mattered Problem is You are considering the purchase of a street 5117 per share by the end of the pow. which meerderheteta would end to have for theation to become with them here You are considering purchasing some shores af me to add to your portale Thestos currently Gott 56 the market. Your researches pravide you want The holenders Dedi 1.20 donum.then we The stock has a correlations with the The S&P/Composite Indie standard deviation of - Motocally, the market returned more than The current yed As an investor who is prepared to take on more risk (more tolerance for risk would you choose? Briefly explain. (2 marks) Asset Expected Standard Comelation Retum Deviation Coefficient SOS 15.0% 14.0% 40.0% Y Portfolio Components Weight of x Weight of Y 100.00% 0.00% 90.00% 10.00% 80.00% 20.00% 70.00% 30.00% 60.00% 40.00% 50.00% 50.00% 40.00% 60.00% 30.00% 70.00% 20.00% 80.00% 10.00% 90.00% 0.00% 100.00% Porfolio Characteristics Expected Standard Retum 5.00% 15.05 5.90% 12.0% 6.80% 10.65 7.70% 113 8.60% 13.9% 950 17.5 10.40% 21.6 11.30% 26.0% 12.20% 30.6% 13.10 14.00 400% G K Winter 2021 Assignment 12 Problem R2 (10 marks) You have been given the following incomplete data and must complete the table. E comprises two different assets. [2 marks each) Beta Asset 1 Beta Asset 2 Weight in Asset : Portfolio Portfolio 10.5 1.5 04 a Portfolio 26 0.65 05 13 Portfolio 3 1.1 1.9 c 21 Portfolio 4 1.25 08 0.75 d Portfolio 1.3 02 3 Problem 83 (15 marks) You are following 5 different stocks and need to issue a recommendation buy, hold customers. The market return is 10%, with a standard deviation of 15%. The risk fra CAPM is assumed to hold Security Expected Standard Beta Recommendation return Deviation Avery Airline 15% 19% 1.6 Bubba's Bakery 10% 13% 1.15 Carter Crystal 8% 10% 0.65 Dee's Designs 9% 14% Ernie's Electronics 12% 16% 1.35 a) State your recommendation (buy, hold, sell) for each security. Show your we b) Plot and label the Security Market Line (SML) and plot each stock's Expected Return and Risk (5 maris) 03 Problem 45 marks) You are considering the purchase of a stock priced at $100 per share you think th $117 per share by the end of the year at which time will added stra which Problemas Information on wees. X&Y below. Forcare the weights of use and stand the speed and standard. Der al Plot the portion on a prays and Minimun wone port relict portfolio Iman merk Ruum SEN 160 SOS BON TON 10 JE DODON 0.00 10 DON 30.00 20. 70 DON 60.000 0.00 DON 40.00 GODON 20.00 70 ON NODON 10.00 SO DON . jo 220 130 Winter 2001 Aignent 2 Problem 12/30 marty You love been pen the following incompleted and the title comprender a amar Data Rati wegen Autosole Beta Portfolio 1 os Porto 1965 105 Pontos 123 Port 3 02 Problem 315 mars You are flowing cocks and data recomendous odor to your customers. The market returns with a devine Theme CARMS Expected andard Dee's Best Aline BE 110 Canter Code DE 103 335 Start your recommendation was for a show your handlated Security Market Mattered Problem is You are considering the purchase of a street 5117 per share by the end of the pow. which meerderheteta would end to have for theation to become with them here You are considering purchasing some shores af me to add to your portale Thestos currently Gott 56 the market. Your researches pravide you want The holenders Dedi 1.20 donum.then we The stock has a correlations with the The S&P/Composite Indie standard deviation of - Motocally, the market returned more than The current yed As an investor who is prepared to take on more risk (more tolerance for risk would you choose? Briefly explain. (2 marks) Asset Expected Standard Comelation Retum Deviation Coefficient SOS 15.0% 14.0% 40.0% Y Portfolio Components Weight of x Weight of Y 100.00% 0.00% 90.00% 10.00% 80.00% 20.00% 70.00% 30.00% 60.00% 40.00% 50.00% 50.00% 40.00% 60.00% 30.00% 70.00% 20.00% 80.00% 10.00% 90.00% 0.00% 100.00% Porfolio Characteristics Expected Standard Retum 5.00% 15.05 5.90% 12.0% 6.80% 10.65 7.70% 113 8.60% 13.9% 950 17.5 10.40% 21.6 11.30% 26.0% 12.20% 30.6% 13.10 14.00 400% G K Winter 2021 Assignment 12 Problem R2 (10 marks) You have been given the following incomplete data and must complete the table. E comprises two different assets. [2 marks each) Beta Asset 1 Beta Asset 2 Weight in Asset : Portfolio Portfolio 10.5 1.5 04 a Portfolio 26 0.65 05 13 Portfolio 3 1.1 1.9 c 21 Portfolio 4 1.25 08 0.75 d Portfolio 1.3 02 3 Problem 83 (15 marks) You are following 5 different stocks and need to issue a recommendation buy, hold customers. The market return is 10%, with a standard deviation of 15%. The risk fra CAPM is assumed to hold Security Expected Standard Beta Recommendation return Deviation Avery Airline 15% 19% 1.6 Bubba's Bakery 10% 13% 1.15 Carter Crystal 8% 10% 0.65 Dee's Designs 9% 14% Ernie's Electronics 12% 16% 1.35 a) State your recommendation (buy, hold, sell) for each security. Show your we b) Plot and label the Security Market Line (SML) and plot each stock's Expected Return and Risk (5 maris) 03 Problem 45 marks) You are considering the purchase of a stock priced at $100 per share you think th $117 per share by the end of the year at which time will added stra
