ZuoTi.Pro
Question

Determine which one of these three portfolios dominates another. Name the dominated portfolio and the portfolio...

Determine which one of these three portfolios dominates another. Name the dominated portfolio and the portfolio that dominates it. Portfolio Purple has an expected return of 9 percent and risk of 23 percent. The expected return and risk of portfolio Blue are 12 percent and 22 percent, and for the Yellow portfolio are 10 percent and 28 percent.

  • Portfolio Yellow dominates portfolios Purple and Blue.

  • Portfolio Purple dominates portfolios Blue and Yellow.

  • Portfolio Blue dominates portfolios Purple and Yellow.

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Portfolio Blue dominates portfolios Purple and Yellow.

Portfolio Blue has highest expected return with lower standard deviation.

0 0
Add a comment
Know the answer?
Add Answer to:
Determine which one of these three portfolios dominates another. Name the dominated portfolio and the portfolio...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 4. Investor equilibrium The following graph shows the set of portfolio opportunities for a multiasset case....

    4. Investor equilibrium The following graph shows the set of portfolio opportunities for a multiasset case. The point RF corresponds to a risk-free asset, the red curve BME is the efficient frontier, the shaded area under the efficient frontier represents the feasible set of portfolios of risky assets, and the yellow curves II and I2 are indifference curves for a particular investor. EXPECTED RATE OF RETURN (Percent) 10 RISK (Portfolio's standard deviation) The points on the line PRF MZ represent:...

  • The following graph shows the set of portfolio opportunities for a multiasset case. The point rrr...

    The following graph shows the set of portfolio opportunities for a multiasset case. The point rrr corresponds to a risk-free asset, the red curve BME is the efficient frontier, the shaded area under the efficient frontier represents the feasible set of portfolios of risky assets, and the yellow curves I and I 2 are indifference curves for a particular investor. EXPECTED RATE OF RETURN Percent) RISK IPortfolio's standard deviation The points on the line PREMZ represent: Portfolios that are dominated...

  • According to the Treynor meassure. Which of the following portfolios are outperforming the market portfolio? The...

    According to the Treynor meassure. Which of the following portfolios are outperforming the market portfolio? The risk free rate of interest is 5% Portfolio A: Standard deviation: 20%, Expected return: 14%. The covariance between the portfolio and the market portfolio is 0,045 Portfolio B: Expected return: 25% (according to CAPM) Portfolio C: Alpha: -1%: Beta: 2 Portfolio D: Expected return: 11%: Beta 0,8 The market portfolio: Standard deviation: 15%, Expected return: 10%, Select one: a. Portfolio A b. Portfolio C...

  • 4. Investor equilibrium The following graph shows the set of portfolio opportunities for a multiasset case....

    4. Investor equilibrium The following graph shows the set of portfolio opportunities for a multiasset case. The point Pre corresponds to a risk-free asset, the red curve BME is the efficient frontier, the shaded area under the efficient frontier represents the feasible set of portfolios of risky assets, and the yellow curves 11 and 12 are indifference curves for a particular investor. EXPECTED RATE OF RETURN (Percent) 10 RISK (Portfolio's standard deviation) Point A, where the line PRF MZ is...

  • Question 3 (0.4 points) The following data are available for three portfolios and the market for...

    Question 3 (0.4 points) The following data are available for three portfolios and the market for a recent 10-year period. Which portfolio has highest Jensen's alpha conditioning on CAPM risk-adjusted return? Portfolio Return (%) Std.Dev. (%) Beta 1 14 21 1.15 2 16 24 1.00 3 20 28 1.25 S&P 500 12 20 Risk-free rate 4 3 O2 S&P 500 1

  • Consider a one factor economy where the risk free rate is 5%, and portfolios A and...

    Consider a one factor economy where the risk free rate is 5%, and portfolios A and B are well diversified portfolios. Portfolio A has a beta of 0.6 and an expected return of 8%, while Portfolio B has a beta of 0.8 and an expected return of 10%. Is there an arbitrage opportunity in this economy? If yes, how could you exploit it?

  • Assume the CAPM holds. Consider three feasible portfolios of stocks X, Y and Z with the...

    Assume the CAPM holds. Consider three feasible portfolios of stocks X, Y and Z with the following return characteristics: Portfolio X Y Z Expected return 7.5% 5% 10% Standard deviation 5% 10% 15% a) Explain why beta is the appropriate measure of risk in this world. (5 marks) b) Portfolio Y is known to be uncorrelated with the market. Explain why this property implies that the risk-free rate in the economy is 5%. (5 marks) c) It is known that...

  • The efficient set of portfolios The following graph represents the relationship between the efficient set of...

    The efficient set of portfolios The following graph represents the relationship between the efficient set of possible portfolios and various investors. Assuming that the black line represents the efficient frontier, which of the following best describes portfolios that lie to the left of this line? ___Indifferent ___Unattainable ___Efficient ___Inefficient On the preceding graph, the green and blue lines represent the indifference curves of two investors, investor Green and investor Blue. Which of these investors is more risk averse? ___Not enough...

  • Which of the following portfolios has the least risk? Select one: a. A portfolio of Treasury...

    Which of the following portfolios has the least risk? Select one: a. A portfolio of Treasury bills b. A portfolio of U.S. common stocks of large firms c. A portfolio of long-term U.S. government bonds d. A portfolio of U.S. common stocks of small firms

  • please answer The following graph represents the relationship between the efficient set of possible portfolios and...

    please answer The following graph represents the relationship between the efficient set of possible portfolios and various investors EXPECTED RATE OF RETURN (Percent) 10 Investor Green Investor Blue Efficient Frontier 10 RISK (Portfolio's standard deviation) Assuming that the black line represents the efficient frontier, which of the following best describes portfolios that lie to the right of this ine? On the preceding graph, the green and blue lines represent the indifference curves of two investors, investor Green and investor Blue....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT