The table below contains the average returns, standard deviation of returns and correlation of returns with US indexfor different countries. All data are in US dollar terms. The US T-Bill rate is 3%. Determine which of thesecountries are suitable for a US based investor to diversifv into. Show the necessarv calculationsUS T-Bill Rate %3 US T-Bill Rate %CountryUSACanadaUKFranceItalySpainRussiaSouth AfricaEgyptJapanSingaporeHong KongIndiaReturn %313.695.845.896.337.4511.2614.647.8423.629.022.311.828.14StDev. %2034.427.112534.7626.9325.130.7427.921.322.672232.33Correlationwith USA10.80.750.720.590.570.330.470.260.450.540.480.36

Information pertaining to the average returns, standard deviation of returns and correlation of…

US T-Bill Rate % Country USA Canada UK France Italy Spain Russia South Africa Egypt Japan Singapore Hong Kong India Return % 3 13.69 5.84 5.89 6.33 7.45 11.26 14.64 7.84 23.62 9.02 2.3 11.82 8.14 StDev. % 20 34.4 27.11 25 34.76 26.93 25.1 30.74 27.9 21.3 22.67 22 32.33 Correlation with USA 1 0.8 0.75 0.72 0.59 0.57 0.33 0.47 0.26 0.45 0.54 0.48 0.36

US T-Bill Rate % Country USA Canada UK France Italy Spain Russia South Africa Egypt Japan Singapore Hong Kong India Return % 3 13.69 5.84 5.89 6.33 7.45 11.26 14.64 7.84 23.62 9.02 2.3 11.82 8.14 StDev. % 20 34.4 27.11 25 34.76 26.93 25.1 30.74 27.9 21.3 22.67 22 32.33 Correlation with USA 1 0.8 0.75 0.72 0.59 0.57 0.33 0.47 0.26 0.45 0.54 0.48 0.36

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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