Question 5: Portfolio Performance Evaluation; International DiversificationYour uncle invested $1,000,000 in a portfolio consisting of both equity sharesand bonds at the end of 2013. He did not buy nor sell any securitiesthereafter. The following table provides end of the year market values of theportfolio together with the dividend income and coupon income generated byit for the five years ending in 2018:YearMarket value of theI.201320142015201620172018(i)(ii)(iii)portfolio$1,000,000$1,200,000$1,100,000$1,350,000$1,150,000$1,200,000Dividend income$110,000$90,000$120,000$80,000$90,000Couponincome$50,000$50,000$50,000$50,000$50,000Calculate the annual rates of return for the five years ending in 2018.Calculate the arithmetic average return and the geometric averagereturn for the portfolio for the five-year period ending in 2018.Given your answer to (ii) above, which measure of average return ismore useful in predicting the future performance of your uncle'sportfolio? Explain why.

To determine the annual rates of return we need to use the formula below for each year. Annual…

(i) (ii) (iii) Calculate the annual rates of return for the five years ending in 2018. Calculate the arithmetic average return and the geometric average return for the portfolio for the five-year period ending in 2018. Given your answer to (ii) above, which measure of average return is more useful in predicting the future performance of your uncle's portfolio? Explain why.

(i) (ii) (iii) Calculate the annual rates of return for the five years ending in 2018. Calculate the arithmetic average return and the geometric average return for the portfolio for the five-year period ending in 2018. Given your answer to (ii) above, which measure of average return is more useful in predicting the future performance of your uncle's portfolio? Explain why.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Investor has had the following returns in the Magic Fund for the past 4 years: 15%, 25%, -30%, 18%. c) State whether the annual geometric return (assume positive) should be higher, lower, or the same as the annual arithmetic return. Neither calculation nor explanation is necessary. d) State which measure, annual arithmetic return or annual geometric return, better represents how an investment performed over time. Neither calculation nor explanation is necessary.
State the return rate (in %) for your optimal portfolio.
An investment advisor has recommended a R50,000 portfolio containing assets R, J, and K; R25,000 will be invested in asset R, with an expected annual return of 12 percent; R10,000 will be invested in asset J, with an expected annual return of 18 percent; and R15,000 will be invested in asset K, with an expected annual return of 8 percent. What is the expected annual return of this portfolio? What is the correct answer? A. 12.01% B. 12.00% C. 11.98% D. 12.93%
Subject name: Principles of Insurance and Risk Management, Answer it fast please.
Please Solve In 15mins I will Thumbs-up
Alternative 1 2 WN 3 Investment 100% of asset F 50% of asset F and 50% of asset G 50% of asset F and 50% of asset H Year 2019 2020 2021 2022 Asset F 10% 11% 12% 13% Historical Return Asset G 11% 10% 9% 8% Asset H 8% 9% 10% 11%
answer in text form please (without image)
Remember, the expected value of a probability distribution is a statistical measure of the average (mean) value expected to occur during all possible circumstances. To compute an asset’s expected return under a range of possible circumstances (or states of nature), multiply the anticipated return expected to result during each state of nature by its probability of occurrence. Consider the following case: James owns a two-stock portfolio that invests in Blue Llama Mining Company (BLM) and Hungry Whale Electronics (HWE). Three-quarters of James’s portfolio value consists of BLM’s shares, and the balance consists of HWE’s shares. Each stock’s expected return for the next year will depend on forecasted market conditions. The expected returns from the stocks in different market conditions are detailed in the following table: Market Condition Probability of Occurrence Blue Llama Mining Hungry Whale Electronics Strong 0.25 27.5% 38.5% Normal 0.45 16.5% 22% Weak 0.30 -22%…
please this part of the question ASAP too What is the standard deviation of the rate of return on your client's portfolio? (Round your intermediate calculations and final answer to 1 decimal place.)
If Justine Bieber have P1,000,000 and he needs to create an investment portfolio, what are the assets that he might to considerate or intend to invest upon? Have an estimate proportion. Why Justine Bieber choosing those assets? Explain briefly and intelligently.
The data presented below represents the expected returns on a financial asset in different seasons of the year. Season of year Probability Returns Spring 40% 2% Summer 35% 6% Winter 25% 10% What is the expected return on the asset? ii) What is the standard deviation on the asset? What is the covariance of the asset?
You are analyzing a Time Series of historic market information and found the following information for a particular investment security: the Rate of Return in 2012 was -6.72%; was 18.22% in 2013; was 7.75% in 2014; was 11.45% in 2015; was 4.94% in 2016; and was 18.11% in 2017. What is the arithmetic average rate of return? Show your answer as a percentage rounded to two places (12.34% for example). Group of answer choices 7.64% 8.96% 8.14% 7.24% None of the above

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