University of Miami Finance Questions
Description
Stock Ticker Symbol
JPM
MS
Stock Name
JPMorgan Chase
Morgan Stanley
Stock Expected Return
0.2232
0.2745
Stock Standard Deviation – Annual
0.2455
0.2999
JPM JPMorgan Chase
Portfolios
Security Weight
Annual Standard Deviation
(Weight)^2
(Annual Standard Deviation)^2
Actual Portfolio
0.5
0.2455
0.25
0.06027025
Portfolio A
0.9
0.2455
0.81
0.06027025
Portfolio B
0.7
0.2455
0.49
0.06027025
Portfolio C
0.5
0.2455
0.25
0.06027025
Portfolio D
0.3
0.2455
0.09
0.06027025
Portfolio E
0.1
0.2455
0.01
0.06027025
MS Morgan Stanley
Portfolios
Security Weight
Annual Standard Deviation
(Weight)^2
(Annual Standard Deviation)^2
Actual Portfolio
0.5
0.2999
0.25
0.08994001
Portfolio A
0.1
0.2999
0.01
0.08994001
Portfolio B
0.3
0.2999
0.09
0.08994001
Portfolio C
0.5
0.2999
0.25
0.08994001
Portfolio D
0.7
0.2999
0.49
0.08994001
Portfolio E
0.9
0.2999
0.81
0.08994001
Portfolio
Portfolio Risk
Portfolio Return
Portfolio A
0.22298
0.22833
Portfolio B
0.19398
0.23859
Portfolio C
0.19378
0.24885
Portfolio D
0.22247
0.25911
Portfolio E
0.27102
0.26937
Review the portfolio above. Assume that a client has asked you to help them decide which portfolio to choose. In your post:
** Explain to your classmate the concept of indifference curves.
** Identify one portfolio from their graph that would be appropriate for an investor with high-risk tolerance and one portfolio from their graph that would be appropriate for an investor with low-risk tolerance.
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