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James Peterson has gathered the following information of 5 exchange-traded funds (ETFS). The performance data of the ETFS are presented in the following table. ETF Price Price Dividend 12-month Annual risk Correlation with 4/30/2020 4/30/2021 paid total return (STDEV) ETF A A 100 $0 44% 32% +100% B 100 $0 3% 4% - 16% 100 $0 10% 27% +65% D 100 $3 15% 15% +76% E 100 $1 10% 17% +71% Question ANSWER 1. Figure out the ending prices Please fill in your answer in the "Price on 4/30/2021 for all 5 ETFS. 4/30/2021" column directly. (Showing work is optional.) What would be the shape of the efficient frontier when James invests 2. in ETFS A & B? 3. Select two ETFS that are least efficient. 4. Which ETF is least risky? 5. Which ETF is least correlated with ETF A? 6. Calculate James' portfolio risk Portfolio return: and return if he invests in ETFS A and D (Showing work is optional.) equally. (W, = W, = 50%) Portfolio risk: |(Showing work is optional.) 7. and return if he invests 50% in ETF A (Showing work is optional.) and 50% in a risk-free asset yielding 0.25% during the same 12-month investment period. Calculate James' portfolio risk Portfolio return: Portfolio risk: (Showing work is optional.)

James Peterson has gathered the following information of 5 exchange-traded funds (ETFS). The performance data of the ETFS are presented in the following table. ETF Price Price Dividend 12-month Annual risk Correlation with 4/30/2020 4/30/2021 paid total return (STDEV) ETF A A 100 $0 44% 32% +100% B 100 $0 3% 4% - 16% 100 $0 10% 27% +65% D 100 $3 15% 15% +76% E 100 $1 10% 17% +71% Question ANSWER 1. Figure out the ending prices Please fill in your answer in the "Price on 4/30/2021 for all 5 ETFS. 4/30/2021" column directly. (Showing work is optional.) What would be the shape of the efficient frontier when James invests 2. in ETFS A & B? 3. Select two ETFS that are least efficient. 4. Which ETF is least risky? 5. Which ETF is least correlated with ETF A? 6. Calculate James' portfolio risk Portfolio return: and return if he invests in ETFS A and D (Showing work is optional.) equally. (W, = W, = 50%) Portfolio risk: |(Showing work is optional.) 7. and return if he invests 50% in ETF A (Showing work is optional.) and 50% in a risk-free asset yielding 0.25% during the same 12-month investment period. Calculate James' portfolio risk Portfolio return: Portfolio risk: (Showing work is optional.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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James Peterson has gathered the following information of 5 exchange-traded funds (ETFS). The performance data of the ETFS are presented in the following table. Annual risk Correlation with (STDEV) ETF Price Price Dividend 12-month 4/30/2020 4/30/2021 paid total return ETF A A 100 $0 44% 32% +100% B 100 $0 3% 4% - 16% 100 $0 10% 27% +65% D 100 $3 15% 15% +76% E 100 $1 10% 17% +71% Question ANSWER 1. Figure out the ending prices Please fill in your answer in the "Price on 4/30/2021 for all 5 ETFS. 4/30/2021" column directly. (Showing work is optional.) 2. What would be the shape of the efficient frontier when James invests in ETFS A & B? 3. Select two ETFS that are least efficient. Which ETF is least risky? Which ETF is least correlated 4. 5. with ETF A? 6. Calculate James' portfolio risk Portfolio return: and return if he invests in ETFS A and D (Showing work is optional.) equally. (W, = W, = 50%) Portfolio risk: (Showing work is optional.) 7. Calculate James' portfolio risk Portfolio return: and return if he invests 50% in ETF A (Showing work is optional.) and 50% in a risk-free asset yielding Portfolio risk: 0.25% during the same investment period. 12-month (Showing work is optional.)
Transcribed Image Text:James Peterson has gathered the following information of 5 exchange-traded funds (ETFS). The performance data of the ETFS are presented in the following table. Annual risk Correlation with (STDEV) ETF Price Price Dividend 12-month 4/30/2020 4/30/2021 paid total return ETF A A 100 $0 44% 32% +100% B 100 $0 3% 4% - 16% 100 $0 10% 27% +65% D 100 $3 15% 15% +76% E 100 $1 10% 17% +71% Question ANSWER 1. Figure out the ending prices Please fill in your answer in the "Price on 4/30/2021 for all 5 ETFS. 4/30/2021" column directly. (Showing work is optional.) 2. What would be the shape of the efficient frontier when James invests in ETFS A & B? 3. Select two ETFS that are least efficient. Which ETF is least risky? Which ETF is least correlated 4. 5. with ETF A? 6. Calculate James' portfolio risk Portfolio return: and return if he invests in ETFS A and D (Showing work is optional.) equally. (W, = W, = 50%) Portfolio risk: (Showing work is optional.) 7. Calculate James' portfolio risk Portfolio return: and return if he invests 50% in ETF A (Showing work is optional.) and 50% in a risk-free asset yielding Portfolio risk: 0.25% during the same investment period. 12-month (Showing work is optional.)
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