The Knowles/Armitage (KA) group at Merrill Lynch advises clients on how to create a diversified investment portfolio. One of the investment alternatives they make available to clients is the All World Fund composed of global stocks with good dividend yields. One of their clients is interested in a portfolio consisting of investment in the All World Fund and a treasury bond fund. The expected percent return of an investment in the All World Fund is 7.80% with a standard deviation of 18.90%. The expected percent return of an investment in a treasury bond fund is 5.50% and the standard deviation is 4.60%. The covariance of an investment in the All World Fund with an investment in a treasury bond fund is −12.4. (Round your answers for standard deviation to two decimal places.) (a) Which of the funds would be considered the more risky? Why? Neither fund is risky since both are equivalent. A treasury bond fund would be considered the more risky because it has a smaller standard deviation.    The All World Fund would be considered the more risky because it has a larger expected percent return. A treasury bond fund would be considered the more risky because it has a smaller expected percent return. The All World Fund would be considered the more risky because it has a larger standard deviation.    v   (b) If KA recommends that the client invest 75% in the All World Fund and 25% in the treasury bond fund, what is the expected percent return and standard deviation for such a portfolio? expected percent - return standard deviation - What would be the expected return and standard deviation, in dollars, for a client investing $40,000 in such a portfolio? expected return $ - standard deviation $ - (c) If KA recommends that the client invest 25% in the All World Fund and 75% in the treasury bond fund, what is the expected return and standard deviation for such a portfolio?   expected percent  - return standard deviation -   What would be the expected return and standard deviation, in dollars, for a client investing $40,000 in such a portfolio? expected return $ - standard deviation $ - (d) Which of the portfolios in parts (b) and (c) would you recommend for an aggressive investor? Which would you recommend for a conservative investor? Why? An aggressive investor should use the portfolio in ---Select--- part (b) or part (c) because it has a ---Select--- smaller or larger return. A conservative investor should elect the portfolio in ---Select--- part (b) or part (c) because it has a ---Select--- smaller or larger standard deviation (and because of this, is less risky).

Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) gives a good barometer of the overall stock market. On January 31, 2017, 9 of the 30 stocks making up the DJIA increased in price.On the basis of this fact, a financial analyst claims we can assume that 76% of the stocks traded on the New York Stock Exchange (NYSE) went up the same day. A sample of 61 stocks traded on the NYSE that day showed that 43 went up. You are conducting a study to see if the proportion of stocks that went up is significantlysmaller than 76%. You use a significance level of α=0.01α=0.01. For this study, we should use Select an answer 2-SampTInt 2-PropZInt 1-PropZInt T-Test χ²GOF-Test 2-SampTTest 2-PropZTest TInterval ANOVA 1-PropZTest χ²-Test    The null and alternative hypotheses would be:     H0H0: ? p μ  Select an answer > = < ≠  (please enter a decimal)      H1H1: ? p μ  Select an answer ≠ = > <  (Please enter a decimal)      The test statistic =…

If a fictional treatment costs a total of $45,000 at today’s value and increases a person’s quality of life from 0.5 to 0.6 for the remainder of the person’s life from age 70 onward, and the person’s expected life span increases from 73 to 75, what is the total gain in QALYs (Quality-adjusted Life Years), and what is the ICER (Incremental Cost-effectiveness Ratio)?

Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) gives a good barometer of the overall stock market. On January 31, 2006, 9 of the 30 stocks making up the DJIA increased in price (The Wall Street Journal, February 1, 2006). On the basis of this fact, a financial analyst claims we can assume that 30% of the stocks traded on the New York Stock Exchange (NYSE) went up the same day.A sample of 80 stocks traded on the NYSE that day showed that 11 went up.You are conducting a study to see if the proportion of stocks that went up is is significantly less than 0.3. You use a significance level of α=0.02α=0.02.What is the test statistic for this sample? (Report answer accurate to three decimal places.)test statistic = What is the p-value for this sample? (Report answer accurate to four decimal places.)p-value = The p-value is... less than (or equal to) αα greater than αα This test statistic leads to a decision to... reject the null accept the null fail…