You work for an investment management company . Your senior manager has asked you to advise a client who wishes to invest in a portfolio consisting of three assets - an equity fund (E) a corporate bond fund ( and a money market fund (M ). You are presented with the following information : The client's coefficient of risk aversion is 3 (i.e. A3). The expected returns and standard deviation of various portfolios that the client considers are as follows : WB Portfolio 1 2 3 4 WE 0.5 0.3 0.4 0.3 0.6 0.2 WM 0.2 0.1 0.4 E() 0.14 0.08 0.06 0.16 sigma_{p} 0.18 0.12 0.60.2 0.2 Which portfolio would you recommend to this client? (Show your calculations)

Quiz navigat 00 You work for an investment management company. Your senior manager has asked you to advise a client who wishes to invest in a portfolio consisting of three assets - an equity fund (E), a corporate bond fund (B) and a money market fund (M). You are presented with the following information: The client's coefficient of risk aversion is 3 (i.e. A=3). The expected returns and standard deviation of various portfolios that the client considers are as follows: Finish attempt... 1 2 3 4 Portfolio WE WB WM 7 8 TO 1 0.3 E(R) 0.14 0.08 0.5 0.3 0.4 2 0.2 0.1 0.4 0.2 OP 0.18 0.12 0.08 0.21 13 14 0.6 0.2 0.2 15 16 3 4 0.06 0.16 0.6 19 20 Which portfolio would you recommend to this client? (Show your calculations) A BI SE