There

are four investors with the same standard quadratic utility function (U = E(r)

– ½Aσ

Choose the best option. Portfolio

diversification does

You have invested in an asset that has the following expected returns across the three potential states of the economy over the next year:

Calculate the expected return and standard deviation of this asset (correct to one decimal place).

Stock

A’s expected return and variance are 0.12 and 0.0424, respectively. Stock B’s expected

return and variance are 0.25 and 0.1234, respectively. The two securities have

a correlation coefficient of 0.55. What are the weights of securities A and B,

w(A) and w(B), in the MVP?

Jimmy

has just sold AON stocks at $281.16 per share. Jimmy bought these stocks five

years ago on NYSE at $139.16 per share. During

this period, he received total dividends worth $4.50 per share. What is Jimmy’s holding

period annualized arithmetic average return?

A

risk-averse investor is choosing between several portfolios. Which portfolio

would they prefer?

Which

of the following is true?

Choose

the best option. Which of the following transaction costs are generally the highest

for a retail investor buying one share of CBA on ASX?

Assume that an investment security has a mean return of 11.6% and standard deviation of 5%. What is the probability of making a loss (to the closest percent)?

Ned

Kelly short sells 3,000 shares of ATVI stock at $76.50 per share. The initial

margin is 70% and  the maintenance margin

is 50%. What price must ATVI be for Ned Kelly to receive the margin call?