Homework answers / question archive / You are considering two assets with the following characteristics: E(R1) = 0,15 E(01) = 0,10 E(R2) = 0,20 E(02) = 0,20 Use below options i

You are considering two assets with the following characteristics: E(R1) = 0,15 E(01) = 0,10 E(R2) = 0,20 E(02) = 0,20 Use below options i

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You are considering two assets with the following characteristics: E(R1) = 0,15 E(01) = 0,10 E(R2) = 0,20 E(02) = 0,20 Use below options i. w1 = 0,2; W2 = 0.8 ii. w1 = 0,4; W2 = 0.6 iii. w1 = 0,6; W2 = 0.4 iv. w1 = 0,8; W2 = 0.2 a. Without calculation tell which option is the most preferable for return and why b. Calculate the risk and return of the portfolios. Which is the most preferable from the risk point In this option a mix method for choosing between portfolios will be created. Max (best) return will be rewarded with 100 points. Max (worst) risk will be penalized with minus 100 points C. Example for part c is below. You are expected to solve in the same way Return Risk PENALTIES TOTAL POINTS POINTS 100 A 0.1 0.05 0 -100 -60 B 90 30 0.09 0.05 0.03 0.02 ? 50 -40 10 D 0.04 0.01 40 -20 20 B is the choice Take the correlation between assets as o||