Case: Mid-Atlantic Specialty Financial Risk Response to the case in the text box below. Your response...
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Case: Mid-Atlantic Specialty Financial Risk Response to the case in the text box below. Your response should be at least 500 words to receive any credit. Also, show all relevant work to reach your solution. You may show your work as text, figures, and/or tables. Suppose Mid-Atlantic Specialty is considering two investment strategies: - 50 percent in Amgen Inc. (AMGN) and 50 percent in Pfizer Inc. (PFE) or 50 percent in Amgen Inc. and 50 percent in Centene Corporation (CNC) Average monthly return Monthly standard deviation AMGN 0.9% 6.7% -15.4% 15.0% PFE 1.0% 4.6% Minimum monthly return Maximum monthly return Correlation Compare the risk of the two portfolios. Why does the risk differ? -7.8% 10.4% CNC 3.2% 16.6% -57.1% 80.3% AMGN PFE 1.0% 5.3% -10.9% 11.3% 0.76 AMGN CNC 2.0% 9.1% -32.8% 33.1% 0.03 For Case: Mid-Atlantic Specialty Financial Risk, what is the average monthly return of the AMGN/PFE portfolio? Write your response as a percentage with one decimal point (ie. 10.5%). Case: Mid-Atlantic Specialty Financial Risk Response to the case in the text box below. Your response should be at least 500 words to receive any credit. Also, show all relevant work to reach your solution. You may show your work as text, figures, and/or tables. Suppose Mid-Atlantic Specialty is considering two investment strategies: - 50 percent in Amgen Inc. (AMGN) and 50 percent in Pfizer Inc. (PFE) or 50 percent in Amgen Inc. and 50 percent in Centene Corporation (CNC) Average monthly return Monthly standard deviation AMGN 0.9% 6.7% -15.4% 15.0% PFE 1.0% 4.6% Minimum monthly return Maximum monthly return Correlation Compare the risk of the two portfolios. Why does the risk differ? -7.8% 10.4% CNC 3.2% 16.6% -57.1% 80.3% AMGN PFE 1.0% 5.3% -10.9% 11.3% 0.76 AMGN CNC 2.0% 9.1% -32.8% 33.1% 0.03 For Case: Mid-Atlantic Specialty Financial Risk, what is the average monthly return of the AMGN/PFE portfolio? Write your response as a percentage with one decimal point (ie. 10.5%).
Expert Answer:
Answer rating: 100% (QA)
To compare the risk of the two portfolios lets calculate the key risk measures for each portfolio the expected return the standard deviation and the c... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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