* La ebook Problem 12-23 Markowity portfolio optimization: Harry Markowitz received the 1990 Nobel Prize for his path-breaking work in portfolio optimization. One version of the Markowite model is based on minimizing the variance of the portfolio subject to a constraint on return. The below table shows the annual retum (*) for five 1-year periods for the six mutual funds with the last row that gives the SAP 500 return for each planning scenario. Scenario 1 represents a year in which the annual returns are good for all the mutual funds. Scenario 2 is also a good year for most of the mutual funds. But scenario 3 is a bad year for the watcap valve tund, scenario 4 is a bad year for the intermediate-term bond fund, and scenario 5 is a bad year for four of the six mutual funds MUTUAL FUND PERFORMANCE IN FIVE SELECTED YEARLY SCENARIOS Minha Fund Foreign Stock Intermediate-Term Bond Large-Cap Growth Large-Cap Vate Small Cap Growth Small Cap Value S&P 500 Return Planning Scenarios Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 10.06 13.12 13.47 4542 -21.93 17.64 -3.25 7.51 -1.33 7.36 32.41 18.71 33.28 41.46 --23.26 32.36 20.61 12.93 7.016 -5.37 33.14 19.40 5868 -9.02 2456 2532 -6.70 5.43 25.00 20.00 8.00 - 30.000 - 10.00 3.85 17.31 It reach of the scenaries is ally rely and occurs with probably l/s, then the mean return or expected return of the portfolio Previous All work sava Emaior Sve and ta Submit Assignment for Grading 25 MacBook Air 30 000 FO A * # 3 $ 4 % 5 & 7 6 8 0 F C Y P a book Problem 12-07 Hanson Inn is a 96-room hotel located near the airport and convention center in Louisville, Kentucky. When a convention or a Special event is in town, Hanson increases its normal room rates and takes reservations based on a revenue management system. The Classic Corvette Owners Association scheduled its annual convention in Louille for the first weekend in June Hanson Inn agreed to make at least 50% of its rooms available for convention attendees at a special convention rate in order to be listed as a recommended hotel for the convention. Although the majority of attendees at the arvul meeting typically request Friday and Saturday two-night package, some tendees may select a Friday night only or a Saturday night only ervation Customers not attending the convention may also request Friday and Saturday Night package, or make a Friday night only or Saturday night only reservation. Thus, six types of reservations are possible convention customers tonight package Convention customers Friday Night only convention customers/Saturday night only, regular customer wenight package regular customers/Friday night only and regulatomers/Saturday night only The cost for each type of reservation is shown her Creion Regular Two Night Pack $225 5225 Friday Night Daly $123 $146 Saturday Night Only $130 $157 The anticipated demand for each type of reservation is as follows: The Night Saturday Night Only 15 Convention Bar Friday Night Only 20 30 40 20 Previous All ima Set Sum sint for Grading 25 at x] P9 Macbook Al Po $ 4 % 5 2 3 6 7 OO W E R T Y U 0 P S D UL G H * La ebook Problem 12-23 Markowity portfolio optimization: Harry Markowitz received the 1990 Nobel Prize for his path-breaking work in portfolio optimization. One version of the Markowite model is based on minimizing the variance of the portfolio subject to a constraint on return. The below table shows the annual retum (*) for five 1-year periods for the six mutual funds with the last row that gives the SAP 500 return for each planning scenario. Scenario 1 represents a year in which the annual returns are good for all the mutual funds. Scenario 2 is also a good year for most of the mutual funds. But scenario 3 is a bad year for the watcap valve tund, scenario 4 is a bad year for the intermediate-term bond fund, and scenario 5 is a bad year for four of the six mutual funds MUTUAL FUND PERFORMANCE IN FIVE SELECTED YEARLY SCENARIOS Minha Fund Foreign Stock Intermediate-Term Bond Large-Cap Growth Large-Cap Vate Small Cap Growth Small Cap Value S&P 500 Return Planning Scenarios Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 10.06 13.12 13.47 4542 -21.93 17.64 -3.25 7.51 -1.33 7.36 32.41 18.71 33.28 41.46 --23.26 32.36 20.61 12.93 7.016 -5.37 33.14 19.40 5868 -9.02 2456 2532 -6.70 5.43 25.00 20.00 8.00 - 30.000 - 10.00 3.85 17.31 It reach of the scenaries is ally rely and occurs with probably l/s, then the mean return or expected return of the portfolio Previous All work sava Emaior Sve and ta Submit Assignment for Grading 25 MacBook Air 30 000 FO A * # 3 $ 4 % 5 & 7 6 8 0 F C Y P a book Problem 12-07 Hanson Inn is a 96-room hotel located near the airport and convention center in Louisville, Kentucky. When a convention or a Special event is in town, Hanson increases its normal room rates and takes reservations based on a revenue management system. The Classic Corvette Owners Association scheduled its annual convention in Louille for the first weekend in June Hanson Inn agreed to make at least 50% of its rooms available for convention attendees at a special convention rate in order to be listed as a recommended hotel for the convention. Although the majority of attendees at the arvul meeting typically request Friday and Saturday two-night package, some tendees may select a Friday night only or a Saturday night only ervation Customers not attending the convention may also request Friday and Saturday Night package, or make a Friday night only or Saturday night only reservation. Thus, six types of reservations are possible convention customers tonight package Convention customers Friday Night only convention customers/Saturday night only, regular customer wenight package regular customers/Friday night only and regulatomers/Saturday night only The cost for each type of reservation is shown her Creion Regular Two Night Pack $225 5225 Friday Night Daly $123 $146 Saturday Night Only $130 $157 The anticipated demand for each type of reservation is as follows: The Night Saturday Night Only 15 Convention Bar Friday Night Only 20 30 40 20 Previous All ima Set Sum sint for Grading 25 at x] P9 Macbook Al Po $ 4 % 5 2 3 6 7 OO W E R T Y U 0 P S D UL G H