Thesis: Efficient Portfolio

Pages: 1 (349 words)  ·  Style: APA  ·  Bibliography Sources: 2  ·  File: .docx  ·  Level: College Senior  ·  Topic: Accounting - Personal Finance  ·  Buy for $19.77

Efficient Portfolio

The weighted average expected return under the new scenario will be 14%. This is calculated as follows:

The standard deviation of returns under the new scenario is 24.5. We calculate the difference between each potential return and the mean. Thus,

(44-14) = 30; (14-14) = 0, and (14+16) = 30.

Each is squared, and then the squares are added together. So 302 = 900. This means that the sum of squares is 900 + 0 + 900 = 1800. This is divided by the number of data points, as follows:

This is the variance. To obtain the standard deviation we take the square root of 600 as follows:

The expected return is .333(12)+(.333)(4)+(.333)(-5.5) = 3.5

The standard deviation therefore is 12.38.

With half in T-bills the expected return is 3.75%. The standard deviation is therefore 6.015. The expected return improves because you reduce the downside risk with the T-bills. This also reduces the variability of the portfolio as well.


The expected return of this portfolio is as follows:

(.5)(15)+(.4)(10)+(.1)(6) = 12.1%… [END OF PREVIEW]

Ordering Options:

Which Option Should I Choose?

1.  Buy Full Paper (1 Pages)

Perfectly formatted MS Word document!


2.  Write a NEW paper for you!

Write a New Paper


Efficient Market Hypothesis Essay

Teaching Reflective Commentary Portfolio Research Paper

Portfolio Management Project Thesis

Implications of the Efficient Market Hypothesis Essay

Markowicz the Objective of Modern Portfolio Theory Research Proposal

View 499 other related papers  >>

Cite This Thesis:

APA Format

Efficient Portfolio.  (2009, September 25).  Retrieved November 21, 2019, from

MLA Format

"Efficient Portfolio."  25 September 2009.  Web.  21 November 2019. <>.

Chicago Format

"Efficient Portfolio."  September 25, 2009.  Accessed November 21, 2019.