QUESTION 7 If you have $100K, and want to invest in assets A, B and C. Asset A has historical AVG return of 15%, asset B 20%, and asset C 10%, in what proportions of $100K would you allocate into assets AB and C? - i.e. Which scenario seems most rational? O ABC OA>>B OB>A> O C>A>B QUESTIONS In the above $110K allocation problem, you decided to allocate 30% weight in A. 50% weight in B. 20% weight in C, and you want to find its AVG return. Which of the following is the appropriate method to find the mean (AVG) return on the $100K fund invested? a. Weighted Average (WAVG) b. Simple Average c. Geometric Average O d. Arithmetic Average QUESTION 9 In the above example of investing $100K in assets A, B and C with historical AVG return of 1595 from asset A, 20% from asset B, and 10% from asset C. what is the simple or arithmetic average? O 129 O 12.5% O 159 O 16.5% QUESTION 10 In the above $110K allocation problem, if you decided to allocate 30% weight in A, 50% weight in B. 20% weight in C, where the historical mean ROIA = 15%, ROIB = 20% and ROIC= 10%, what is the WAVG? O a. 1596 O b. 15.7596 O c. 16.596 O d. 17.2596 QUESTION 11 Which of the following is not the formula for WAVG? O a WAVG = w;V;where w; is weight of Variable i, and i = A, B, C...etc. 11 O. WAVG =WxVx+wyVy + WzVz. where w; is weight of Variable i, and i = X, Y, and z OC WAVG = wiX, where w; is weight of Variable i, and i= A, B, and c = A Z O. WAVG = w;+ Ex