Risk Free System

kellie asked:


1. with direct investments you know what you are purchasing.
2. portfolio investors take a greater risk
3. direct investors own assets in foreign economy.
4. portfolio investors are provided greater protection against bancruptcy.

Julianna

jim brown asked:


I’m doing my Online AP Statistics homework, and I’m having trouble on a Portfolio risk question:

Two investments, which we will call X and Y, have the following characteristics:

Expected return of X = $50 Expected return of Y = $100
Variance of X = 9,000 Variance of Y = 15,000
Covariance of X and Y = 7,500

If the weight assigned to investment X of portfolio assets is 0.4, what is the portfolio risk?
A. 40%
B. 314.643
C. 80
D. 56.92

I got the equation from the book, but my answer always ends up being 121.63, which isn’t even one of the answers.
These are the values I think they are:
w=0.4
o^2x=9000
o^2y=15000
oxy=7500
Can someone help me?
Here’s the equation and some info on it.

http://en.wikipedia.org/wiki/Modern_portfolio_theory#Mathematically_2

Jeffrey

Miss Yahoo asked:


What kind of asset allocation is good to diversify. For a couple that can take risk, age 30, and have time to let it grow.

Rocky