# Portfolio Management - Question

Q ) An investor would like to have a risk-return relationship of 2.3% and 15% standard deviation or better. How big can his borrowing rate maximum be? how leveraged is this portfolio.

Anybody can help on this.

wut?

Does this question have any background?

Can you post the relevant passage or info?

Q.) The EURO STOXX 50 index represents leading companies in the Eurozone. Assume that this is the market your clients would like to Invest in. Your research department provides you with five possible scenarios for the evolution of this index over the next Year.

Possible Scenarios for next year :

State

Probability

Return

Great Recession

15%

-15%

Moderate Recession

25%

-8%

Neutral

25%

3%

Modest Growth

30%

10%

Boom

5%

20%

1. Based on the table, compute the mean percentage return and the corresponding variance of the investment in this index?
2. An investor would like to have a risk-return relationship of 2.3% and 15% standard deviation or better. How big can his borrowing rate maximum be? how leveraged is this portfolio?

Q.) The EURO STOXX 50 index represents leading companies in the Eurozone. Assume that this is the market your clients would like to Invest in. Your research department provides you with five possible scenarios for the evolution of this index over the next Year.

Possible Scenarios for next year :

State

Probability

Return

Great Recession

15%

-15%

Moderate Recession

25%

-8%

Neutral

25%

3%

Modest Growth

30%

10%

Boom

5%

20%

1. Based on the table, compute the mean percentage return and the corresponding variance of the investment in this index?
2. An investor would like to have a risk-return relationship of 2.3% and 15% standard deviation or better. How big can his borrowing rate maximum be? how leveraged is this portfolio?

Possible scenario:

State Probability Return Great Recession 15% -15% Moderate Recession 25% -8% Neutral 25% 3% Modest Growth 30% 10% Boom 5% 20%

I think its having a problem while pasting. I hope the Question is clear

hi. i have one question on how to solve this question.Question 2: Consider a security with the stock prices
S(1) =
80 with probability 1/8
90 with probability 2/8
100 with probability 3/8
110 with probability 2/8
(a) What is the current price of the stock for which the expected return
would be 12%?
(b) What is the current price of the stock for which the standard deviation
would be 18%

You asked this somewhere else, but I cannot find it.

What is the expected value of the stock price at time t = 1? (That is, I want you to calculate that expected value.)

Ranjesh143 posted this question about 3 days ago.

Dkaush: you could use your BAII to do a lot of the grunt arithmetic on this one!