To achieve international diversification, John invests in the USA and India indexes. What are the weights on
Question:
To achieve international diversification, John invests in the USA and India indexes. What are the weights on the two indexes to achieve the optimal international portfolio? What are the mean and standard deviation of returns on his optimal international portfolio? [All calculations should be done in EXCEL.]
5. Mary instead invests in the USA and Korean indexes. What are the weights on the two indexes to achieve the optimal international portfolio? What are the mean and standard deviation of returns on her optimal international portfolio? [All calculations should be done in EXCEL.]
6. Discuss whose optimal portfolio performs better (John or Mary), and explain why. Also discuss potential reason(s) that causes the difference.
7. Answer the following question based on annualized mean and standard deviation of returns. Some people argue that developing country stock market like India is much riskier than developed economy stock market, e.g., Korea. Based on your analysis, do you agree that from US investors' point of view (e.g., Mary and John mentioned above), Indian stock index is riskier than the Korean stock index? State your reasons why you agree or disagree. Relate the discussion with your analysis as well as what you have learned from the class and the textbook.
Strategic Human Resource Management Contemporary Issues
ISBN: 9780273681632
1st Edition
Authors: Mark N. K. Saunders; Mike Millmore; Philip Lewis; Adrian Thornhill; Trevor Morrow