portfolio containing two assets,L Nand M.Asset L will represent 40% of the dollar value of the portfolio,and asset M will account for the other 60%.The expected returns over the next 6 years,2001-2006,for each of these assets are shown in the ff table:
Year Asset L Asset M
2001 14% 20%
2002 14 18
2003 16 16
2004 17 14
2005 17 12
2006 19 10
Calculate the expected portfolio over the 6 yrs-period,calculate the standard deviation over the 6-year
2007-08-27 03:57:36 · 2 answers · asked by Ampofo A 1 in Business & Finance ➔ Investing
Only complete criminals can modify the Returns for closed accounting periods :-) .. so I assume the 'expected returns' 2001-6 are 'actual returns' ..
Since the term 'Portfolio' is used, it's a reasonable guess that the assets in question are Company Shares (rather than Bonds etc).
Unfortunately it is not mentioned how the returns are made up = the % shown are plainly too large to be normal Dividends (or Bond yeilds), so we have to assume at least some part is made up of Capital gains (in fact, any share paying consistant dividends like these can be expected to rise in value by between 30 and 50%..).. in which case should we also assume that the Portfolio is rebalanced each year ?
2007-08-27 04:24:25 · answer #1 · answered by Steve B 7 · 0⤊ 0⤋
Do your own homework!
2007-08-27 11:01:06 · answer #2 · answered by Anonymous · 0⤊ 0⤋