Mr. Yamcie Oliva considers investing his PHP 100,000 wealth into two assets: SM Prime Holdings Inc. (SMPH) and Jollibee Foods Corp. His friend, Ms. Julie-Anne Ilquin, a financial analyst who works at JD Morguens, suggests partitioning his wealth by investing 70% of it in the stock that has a higher average daily rate of return, and the remaining 30% be invested in the other asset. Mr. Oliva has the following data points of the historical prices for day x=0,1,2,..., 8, HP, of SMPH and JFC: Dayx 0 1 2 3 4 5 6 7 8 9 SMPH 36.4 35.5 36 35.95 35.9 36.85 JFC 245.2 245.8 249.2 249 245 244.6 37.5 248 37.05 245.4 36.6 243.8 36.9 245 a. Mr. Oliva wishes to calculate the daily rate of return R(x) for days x=1,2,..., 9 using the following formula: R(x) = HP-HP-1 HP-1 Generate a table showing the daliy rate of return for both assets. b. It is known that the average daily rate of return can be calculated by solving the following definite integral: J 12 R(x)dx, where a is the maximum number of days you observed the historical prices. Use Romberg integration to approximate the average daily rate of return separately for both assets as accurately as possible. c. To which stock should the 70% of wealth be allocated?
Mr. Yamcie Oliva considers investing his PHP 100,000 wealth into two assets: SM Prime Holdings Inc. (SMPH) and Jollibee Foods Corp. His friend, Ms. Julie-Anne Ilquin, a financial analyst who works at JD Morguens, suggests partitioning his wealth by investing 70% of it in the stock that has a higher average daily rate of return, and the remaining 30% be invested in the other asset. Mr. Oliva has the following data points of the historical prices for day x=0,1,2,..., 8, HP, of SMPH and JFC: Dayx 0 1 2 3 4 5 6 7 8 9 SMPH 36.4 35.5 36 35.95 35.9 36.85 JFC 245.2 245.8 249.2 249 245 244.6 37.5 248 37.05 245.4 36.6 243.8 36.9 245 a. Mr. Oliva wishes to calculate the daily rate of return R(x) for days x=1,2,..., 9 using the following formula: R(x) = HP-HP-1 HP-1 Generate a table showing the daliy rate of return for both assets. b. It is known that the average daily rate of return can be calculated by solving the following definite integral: J 12 R(x)dx, where a is the maximum number of days you observed the historical prices. Use Romberg integration to approximate the average daily rate of return separately for both assets as accurately as possible. c. To which stock should the 70% of wealth be allocated?
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
Related questions
Question
Please answer letter b and c

Transcribed Image Text:Mr. Yamcie Oliva considers investing his PHP 100,000 wealth into two assets: SM Prime
Holdings Inc. (SMPH) and Jollibee Foods Corp. His friend, Ms. Julie-Anne Ilquin, a
financial analyst who works at JD Morguens, suggests partitioning his wealth by investing
70% of it in the stock that has a higher average daily rate of return, and the remaining 30%
be invested in the other asset. Mr. Oliva has the following data points of the historical prices
for day x= 0, 1,2, ..., 8, HP,, of SMPH and JFC:
SMPH| JFC
36.4
245.2
Day x
35.5
245.8
36
249.2
35.95
249
4
35.9
245
36.85
244.6
37.5
248
37.05
245.4
36.6
243.8
9.
36.9
245
a. Mr. Oliva wishes to calculate the daily rate of return R(x) for days x = 1,2, ..,9 using
the following formula:
HP, – HP,-1
R(x) :
HPx-1
Generate a table showing the daliy rate of return for both assets.
b. It is known that the average daily rate of return can be calculated by solving the
following definite integral:
R(x)dx,
where a is the maximum number of days you observed the historical prices. Use
Romberg integration to approximate the average daily rate of return separately for both
assets as accurately as possible.
c. To which stock should the 70% of wealth be allocated?
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps

Recommended textbooks for you

Advanced Engineering Mathematics
Advanced Math
ISBN:
9780470458365
Author:
Erwin Kreyszig
Publisher:
Wiley, John & Sons, Incorporated

Numerical Methods for Engineers
Advanced Math
ISBN:
9780073397924
Author:
Steven C. Chapra Dr., Raymond P. Canale
Publisher:
McGraw-Hill Education

Introductory Mathematics for Engineering Applicat…
Advanced Math
ISBN:
9781118141809
Author:
Nathan Klingbeil
Publisher:
WILEY

Advanced Engineering Mathematics
Advanced Math
ISBN:
9780470458365
Author:
Erwin Kreyszig
Publisher:
Wiley, John & Sons, Incorporated

Numerical Methods for Engineers
Advanced Math
ISBN:
9780073397924
Author:
Steven C. Chapra Dr., Raymond P. Canale
Publisher:
McGraw-Hill Education

Introductory Mathematics for Engineering Applicat…
Advanced Math
ISBN:
9781118141809
Author:
Nathan Klingbeil
Publisher:
WILEY

Mathematics For Machine Technology
Advanced Math
ISBN:
9781337798310
Author:
Peterson, John.
Publisher:
Cengage Learning,

