In the first quarter of the current financial year, Larry Jonesheld an equally weighted portfolio in two assets, E Ltd and F Ltd (that is, 50% of his wealth was held in each asset). The monthly returns for each asset for these 3 months were as follows: Asset July August September E Ltd 4% -3% 2% F Ltd 6% -1% 6% (i) Calculate the arithmetic average return for the three months for the portfolio (ii) Calculate the geometric average return for the three months for the portfolio. (Show answer as a percentage correct to 2 decimal places.)
In the first quarter of the current financial year, Larry Jonesheld an equally weighted portfolio in two assets, E Ltd and F Ltd (that is, 50% of his wealth was held in each asset). The monthly
Asset July August September
E Ltd 4% -3% 2%
F Ltd 6% -1% 6%
(i) Calculate the arithmetic average return for the three months for the portfolio
(ii) Calculate the geometric average return for the three months for the portfolio. (Show answer as a percentage correct to 2 decimal places.)
Briefly explain:
(i) The Australian investment framework; and
(j) The steps in the investment process.
Following are the expected returns for 2020 and the standard deviations of four risky assets. Calculate the coefficient of variation for each asset. [Show answers correct to 3 decimal places.]Based on your answer, state which asset you would prefer and why?
Asset Expected return ([E/R] Standard deviation (SD)
Bean Ltd 13% 11%
Marrow Ltd 12% 10%
Potato Ltd 11% 9%
Pumpkin Ltd 10% 8%
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 2 images
