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Quesl. (A) You are managing an Emerging Market Portfolio of equity using US dollar returns. Portfolio has consistently generated average annual return of 11.8% with
Quesl. (A) You are managing an Emerging Market Portfolio of equity using US dollar returns. Portfolio has consistently generated average annual return of 11.8% with standard deviation of 15%. The risk free reference rate for the portfolio is 5%. You are contemplating to include following investments in your portfolio: a/Indian equity market fund generating return of 12.8% with standard deviation of 20%. Indian equity market has correlation of 0.68 with the existing portfolio. b. Japanese equity market fund generating return of 7% with standard deviation of 10%. Japanese equity market has correlation of 0.42 with the existing portfolio. c. Frontier market Equity Index generating return of 14% with standard deviation of 25%. Frontier market has a correlation of 0.20 with existing portfolio, Which of the above options you will include in your portfolio, also mention the order of your choice. Quesl. (A) You are managing an Emerging Market Portfolio of equity using US dollar returns. Portfolio has consistently generated average annual return of 11.8% with standard deviation of 15%. The risk free reference rate for the portfolio is 5%. You are contemplating to include following investments in your portfolio: a/Indian equity market fund generating return of 12.8% with standard deviation of 20%. Indian equity market has correlation of 0.68 with the existing portfolio. b. Japanese equity market fund generating return of 7% with standard deviation of 10%. Japanese equity market has correlation of 0.42 with the existing portfolio. c. Frontier market Equity Index generating return of 14% with standard deviation of 25%. Frontier market has a correlation of 0.20 with existing portfolio, Which of the above options you will include in your portfolio, also mention the order of your choice
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