1. Compare the stand-alone risk/expected return of each of the four investments and the S&P 500...

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1. Compare the stand-alone risk/expected return of each of the four investments and the S&P 500 listed in exhibit 12.1. a. Please refer to excel sheet 2. MSI is considering two investment strategies: refer to excel sheet - 50 percent in Healthcare Fund and 50 percent in Inverse ETF - 50 percent in Healthcare Fund and 50 percent in Biotech Fund Compare the risk of the two portfolios. Why does the risk differ? When the retums for health care fund are low the retums of inverse ETF are high and vice versa, making them negatively corelated hence the negative correlation coefficient. The retums of healthcare fund and biotech fund are positively correlated hence the positive correlation coefficient. 3. a. Use the historical returns in exhibit 12.2 to create a graph with market characteristic lines for a 1- year T-Bill, Healthcare Fund, Inverse ETF, and Biotech Fund. Compare the market risk of each of the four investments. refer to excel sheet 1. Compare the stand-alone risk/expected return of each of the four investments and the S&P 500 listed in exhibit 12.1. a. Please refer to excel sheet 2. MSI is considering two investment strategies: refer to excel sheet - 50 percent in Healthcare Fund and 50 percent in Inverse ETF - 50 percent in Healthcare Fund and 50 percent in Biotech Fund Compare the risk of the two portfolios. Why does the risk differ? When the retums for health care fund are low the retums of inverse ETF are high and vice versa, making them negatively corelated hence the negative correlation coefficient. The retums of healthcare fund and biotech fund are positively correlated hence the positive correlation coefficient. 3. a. Use the historical returns in exhibit 12.2 to create a graph with market characteristic lines for a 1- year T-Bill, Healthcare Fund, Inverse ETF, and Biotech Fund. Compare the market risk of each of the four investments. refer to excel sheet