Shawn has put all his money into Harrah's hotel while Asia has her money invest in...
Shawn has put all his money into Harrah's hotel while Asia has her money invest in the S & P 500 Market Index. Shawn's portfolio has the same expected return as Asia's portfolio based on this information, it is most likely that:
1. Shawn's portfolio has a lower standard deviation.
2. Shawn's portfolio has the higher beta.
3. Asia's portfolio has the lower standard deviation.
4. Shawn's portfolio has the higher reward to risk ratio.
5.Asia portfolio has the lower beta.
Homework Answers
Asia has put all her money in market index where Beta is usually 1. Whereas Shawn has made an investment totally different from market, more into realty.
Hence, we can say that
Asia Portfolio has a lower beta.
Shawn's portfolio has the higher reward to risk ratio.
Asia has got very low standard deviation since S&P 500 is the
market index itself.
Shawn's portfolio has higher Beta.
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