(b) Suppose you decide to put 60% of your investment in bonds and 40% in real estate. This means you will use a weighted average w = 0.6x + 0.4y. Estimate your expected percentage return μw and risk σw. μw = 9.668 σw = 9.779 (c) Repeat part (b) if w = 0.4x + 0.6y. μw = 10.842 σw = 12.484 1. Compare your results in parts (b) and (c). Which investment has the higher expected return? Which has the greater risk as measured by σw? (A) w = 0.6x + 0.4y produces higher return with greater risk as measured by σw. (B) w = 0.6x + 0.4y produces higher return with lower risk as measured by σw. (C) Both investments produce the same return with the same risk as measured by σw. (D) w = 0.4x + 0.6y produces higher return with lower risk as measured by σw. (E) w = 0.4x + 0.6y produces higher return with greater risk as measured by σw.
(b) Suppose you decide to put 60% of your investment in bonds and 40% in real estate. This means you will use a weighted average w = 0.6x + 0.4y. Estimate your expected percentage return μw and risk σw. μw = 9.668 σw = 9.779 (c) Repeat part (b) if w = 0.4x + 0.6y. μw = 10.842 σw = 12.484 1. Compare your results in parts (b) and (c). Which investment has the higher expected return? Which has the greater risk as measured by σw? (A) w = 0.6x + 0.4y produces higher return with greater risk as measured by σw. (B) w = 0.6x + 0.4y produces higher return with lower risk as measured by σw. (C) Both investments produce the same return with the same risk as measured by σw. (D) w = 0.4x + 0.6y produces higher return with lower risk as measured by σw. (E) w = 0.4x + 0.6y produces higher return with greater risk as measured by σw.
MATLAB: An Introduction with Applications
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ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
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(b) Suppose you decide to put 60% of your investment in bonds and 40% in real estate. This means you will use a weighted average w = 0.6x + 0.4y. Estimate your expected percentage return μw and risk σw.
μw = 9.668
σw = 9.779
(c) Repeat part (b) if w = 0.4x + 0.6y.
μw = 10.842
σw = 12.484
1. Compare your results in parts (b) and (c). Which investment has the higher expected return? Which has the greater risk as measured by σw?
(A) w = 0.6x + 0.4y produces higher return with greater risk as measured by σw.
(B) w = 0.6x + 0.4y produces higher return with lower risk as measured by σw.
(C) Both investments produce the same return with the same risk as measured by σw.
(D) w = 0.4x + 0.6y produces higher return with lower risk as measured by σw.
(E) w = 0.4x + 0.6y produces higher return with greater risk as measured by σw.
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