Domestic Portfolio
Initially each of the three investor portfolios can only include Australian assets: ASX300, AUBD and CASH.
- What are the weights in the optimal risky portfolio for each of the three investors? Accounting and Finance Assignment Help
- How do each of the three investors benefit from the shift to an optimal risky portfolio from a portfolio that has 50% invested in the ASX300 index and 50% invested in the AUBD index?
- Discuss the differences in the asset class weights within each of three investor portfolios as well as the differences between each investor’s portfolios. Why do these differences exist? Do these differences make sense?
International Portfolio
Now the three investor portfolios are allowed to contain investments in any of the eight asset classes.
- What are the weights in the optimal risky portfolio for each of the three investors?
- Discuss the differences in the asset class weights within each of three investor portfolios as well as the differences between each investor’s portfolios. Why do these differences exist? Do these differences make sense?
- What is the benefit to each of three investor types from allowing overseas investments? Which investor type benefitted the most? Why? Minimum Variance Portfolio
- What are the weights in the minimum variance portfolio? Discuss the differences in the weights for this portfolio. Which investor is most adversely affected by having to hold the minimum variance portfolio compared to their optimal risky portfolio?
Your report should conclude with your recommendation on the portfolio that each three investor types should hold. Accounting and Finance Assignment Help