Question 1Consider an investor's choice of a farm unit in the Corn Belt, one in the Califormia CentralValley, or the one in the Great Plains region. An investor added these three assets in oneportfolio. The portfolio composed of equal proportions of the three investments. Use theinformation in the table below to answer the questions that follows (show all your work forpartial credits).Investment AlternativesCorn Belt (1)Central Valley (2)Great Plains (3)Exp. Returnn-0.140.12n-0.07Std. Dev.O-0.08o-0.05oy-0.01Weight in Portfoliow-1/3wz-1/3wy-1/3Correlation Among Investment1 and 2 (p2)-0.301 and 3 (pu) --0.402 and 3 (s) --0.10Portfolio Data for Financial Servicing Analysis Under Riska. Calculate the expected retum of the portfolio.b. Calculate the variance and the standard deviation of the portfolio.c. Calculate the variance and standard deviation of the portfolio assuming that thecorrelation among the investments is all equal to 0.d. Calculate the variance and standard deviation of the portfolio assuming that thecorrelation among the investments is all equal to 1.c. Which scenario should the investor prefer [i.e., (b.), (c.), or (d.)]? Explain youranswer.Question 2What conditions must exist for diversification to be an effective risk response? How doescorrelation afTect diversification?

Given Expected Return,Standard Deviation,Weight in Portfolio Find a,b,c,d,e parts

Answered: Question 1 Consider an investor's…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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