Question: Checked Two Dominated Portfolios Consider these historical returns for these three assets Domestic Foreign Other 15.3% 8.7% 1.3% 16.0% -1.5% 2.0% -1.2% -1.2% -0.1% 15.0%

Checked

Two Dominated Portfolios

Consider these historical returns for these three assets

Domestic

Foreign

Other

15.3%

8.7%

1.3%

16.0%

-1.5%

2.0%

-1.2%

-1.2%

-0.1%

15.0%

7.0%

-0.6%

0.2%

0.2%

5.8%

-0.1%

7.3%

2.7%

-0.6%

8.0%

-1.5%

19.8%

-0.1%

-1.2%

16.7%

-0.6%

1.0%

-1.5%

11.8%

0.2%

Consider the following weights (and start with $1,000).

Domestic

Foreign

Other

Portfolio One

5%

32%

63%

Portfolio Two

5%

63%

32%

Portfolio Three

32%

5%

63%

Portfolio Four

32%

63%

5%

Portfolio Five

63%

5%

32%

Portfolio Six

63%

32%

5%

#1 This question is about the Other asset for Portfolio One.

What is the average of the ten Ending Balance amounts?

A Between 400 and 750

B Between 750 and 840

C Between 840 and 950

D Between 950 and 1,300

#2 This question is about the Foreign asset for Portfolio Four.

What happens at the beginning of the second year?

A Between 0 and 25 will be added

B Between 25 and 100 will be added

C Between 0 and 25 will be subtracted

D Between 25 and 100 will be subtracted

Please put your answer on the Answer Sheet

Two Dominated Portfolios continued

#3 This question is about the Domestic asset for Portfolio Six.

Each year there is a change (from the beginning to the end)

in the dollar value of that asset. What is the largest (most

positive) increase across the ten years?

A Between 10 and 40

B Between 40 and 90

C Between 90 and 120

D Between 120 and 200

Please put your answer on the Answer Sheet

#4 Which portfolios are dominated?

A

Portfolio One and Two

B

Portfolio One and Three

C

Portfolio One and Four

D

Portfolio One and Five

E

Portfolio One and Six

F

Portfolio Two and Three

G

Portfolio Two and Four

H

Portfolio Two and Five

I

Portfolio Two and Six

J

Portfolio Three and Four

K

Portfolio Three and Five

L

Portfolio Three and Six

M

Portfolio Four and Five

N

Portfolio Four and Six

O

Portfolio Five and Six

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