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NEW QUESTION: 1
Millennium Investments (MI), an investment advisory firm, relies on mean-variance analysis to advise its clients. Mi's advisors make asset allocation recommendations by selecting the mix of assets along the capital allocation line that is most appropriate for each client.
One of MPs clients, Edward Alverson, 60 years of age, requests an analysis of four risky mutual funds (Fund W, Fund X, Fund Y, and Fund Z). After examining the four funds, MI finds that all four mutual funds are equally weighted portfolios, and that all of the funds, except Fund Z, are mean-variance efficient. MI also finds that the correlations between all pairs of the mutual funds are less than one.
MI calculates the average variance of returns across all assets within each mutual fund, the average covariance of returns across all pairs of assets within each mutual fund, and each mutual fund's total variance of returns. The results of Mi's calculations are reported in Exhibit 1.
During his meeting with the MT advisors, Alverson explains that he will retire soon, and, consequently, is highly risk-averse. Alverson agrees with Mi's reliance on mean-variance analysis and makes the following statements:
Statement 1: All portfolios lying on the minimum variance frontier are desirable portfolios.
Statement 2: Because I am highly risk-averse, I expect that my investment portfolio on the capital allocation line will have risk and return equal to that of the global minimum variance portfolio.
MI operates under the assumption that all investors agree on the forecasts of asset expected returns, variances, and correlations. Based on these assumptions, MI created the Millennium Investments 5000 Fund (MI-5000), which is a market value-weighted portfolio of all assets in the market. MI derives the forecasts for the MI-5000 Fund and for a fund comprising short-term government securities shown in Exhibit 2.
According to the capital market forecasts provided in Exhibit 2, the intercept and slope of the capital market line are:
A. 0.05 ;0.35
B. 0.05 ;0.07
C. 0.12 ;0.07
Note that the MI-5000 Fund is the "market portfolio" that applies relative market value weights across assets in the portfolio. The Government Securities Fund has a standard deviation of zero, so it is the risk- free asset. Therefore, the data reported in Exhibit 2 provide the inputs needed to derive the capital market line. The intercept of the capital market line equals the risk-free rate (0.05), and the slope of the capital market line equals the Sharpe ratio for the optimal risky portfolio, the MI-5000:
NEW QUESTION: 2
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SPICE로 가져 오는 모든 파일은 해당 파일이 로컬이든 Amazon S3에서 가져온 지 여부에 관계없이 1GB 이하 여야합니다. Amazon S3에서 여러 파일을 검색하는 경우 매니페스트 파일에 지정된 파일의 총 크기는 10GB를 초과 할 수 없으며 매니페스트 파일에 지정된 총 파일 수는 1000 개를 초과 할 수 없습니다. 파일에는 최대 200 개의 열을 포함 할 수 있습니다. 행당 최대 25400 자.
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NEW QUESTION: 3
How many encryption key bits are needed to double the number of possible key values that are available with a 40-bit encryption key?
A. 120 bits
B. 80 bits
C. 41 bits
D. 160 bits
NEW QUESTION: 4
What are the four management processes included in the Project Cost Management (PCM) method?
A. Plan Cost Management, Estimate Costs, Determine Budget, Control Costs
B. Control Costs, Project Cost Management, Determine Budget, Estimate Costs
C. Control Quality, Project Cost Management, Estimate Costs, Determine Budget
D. Estimate Activities, Control Costs, Project Cost Management, Determine Budget
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