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THIS WEEK’S(week 8) the link to help for the assignment:http://thismatter.com/money/investments/portfolios.htmPortfolio risks and returns: coefficient and variationsA portfolio is the total collection of all investments held by an individual or institution, including stocks, bonds, real estate, options, futures, and alternative investments, such as gold or limited partnerships.Most portfolios are diversified to protect against the risk of single securities or class of securities. Hence, portfolio analysis consists of analyzing the portfolio as a whole rather than relying exclusively on security analysis, which is the analysis of specific types of securities. While the risk-return profile of a security depends mostly on the security itself, the risk-return profile of a portfolio depends not only on the component securities, but also on their mixture or allocation, and on their degree of correlation.As with securities, the objective of a portfolio may be for capital gains or for income, or a mixture of both. A growth-oriented portfolio is a collection of investments selected for their price appreciation potential, while an income-oriented portfolio consists of investments selected for their current income of dividends or interest.The selection of investments will depend on one's tax bracket, need for current income, and the ability to bear risk, but regardless of the risk-return objectives of the investor, it is natural to want to minimize risk for a given level of return. The efficient portfolio consists of investments that provide the greatest return for the risk, or—alternatively stated—the least risk for a given return. To assemble an efficient portfolio, one needs to know how to calculate the returns and risks of a portfolio, and how to minimize risks through diversification.Portfolio Returns: Since the return of a portfolio is commensurate with the returns of its individual assets, the return of a portfolio is the weighted average of the returns of its component assets.Portfolio Return FormulaPortfolio Return =n∑k=1Dollar Amount of Asset kDollar Amount of Portfolio×Return on Asset kn = number of assetsThe dollar amount of an asset divided by the dollar amount of the portfolio is the weighted average of the asset and the sum of all weighted averages must equal 100%.Example: Calculating the Expected Return of a Portfolio of 2 AssetsExample PortfolioAsset WeightingsAsset A30%Asset B70%Expected Returnsfor each AssetE(rA)13.9%E(rB)9.7%The expected return of this portfolio is calculated thus:Portfolio Expected Return = .3 × .139 + .7 × .097 = .109 = 10.9%Standard Deviation Formula for Portfolio Returnss = Standard Deviationrk = Specific Returnrexpected = Expected Returnn = Number of Returns (sample size)n – 1 = number of degrees of freedom, which, in statistics, is used for small sample sizes
FINC Project 8

FINC Project 8

Question # 00520683 Posted By: Nesio12 Updated on: 05/01/2017 05:04 PM Due on: 05/06/2017
Subject Finance Topic Finance Tutorials:
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Good Evening,

Seeking assistance for assignment attached.

Please follow Rubic for Max Grade.

Thank you    
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  1. neil2103
    Tutorial # 00517618 Posted By: neil2103 Posted on: 05/01/2017 05:13 PM
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    The solution of FINC Project 8...
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