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Using reports from various security analysts, you identify the following efficient portfolios. Risk-free rate is 6%. Portfolio Expected return Standard deviation 1 12% 8% 2
Using reports from various security analysts, you identify the following efficient portfolios. Risk-free rate is 6%. Portfolio Expected return Standard deviation 1 12% 8% 2 15% 10% 3 18% 15% a) (5 points) Which portfolio is the best to you? (1point) Why? Explain briefly what is compared in your analysis. (4 points) b) If a standard deviation of 13% were acceptable, what would the expected portfolio return be (3 points) and how would you achieve it? (4 points) c) If an expected return of 13.2% were acceptable, what would the standard deviation of portfolio return be (3 points) and how would you achieve it? (4 points) Using reports from various security analysts, you identify the following efficient portfolios. Risk-free rate is 6%. Portfolio Expected return Standard deviation 1 12% 8% 2 15% 10% 3 18% 15% a) (5 points) Which portfolio is the best to you? (1point) Why? Explain briefly what is compared in your analysis. (4 points) b) If a standard deviation of 13% were acceptable, what would the expected portfolio return be (3 points) and how would you achieve it? (4 points) c) If an expected return of 13.2% were acceptable, what would the standard deviation of portfolio return be (3 points) and how would you achieve it? (4 points)
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