Share
Explore BrainMass

Mean Variance criteria in investments

Consider the following 3 investments

Security Expected Return Standard Deviation
J .12 .4
K .14 .4
L .13 .5
M .12 .3

Using the mean-Variance criteria, identify whether one security dominates or whether there is no dominance for each possible pair of securities.

Solution Preview

Hello

Please see the details as below

Security Expected Return Standard Deviation
J .12 .4
K .14 .4
L .13 .5
M .12 .3

There are four options to consider J, K ,L, and M. Expected return and standard deviations are given for each option. Kindly note that variance is the square of standard deviation, so we can ...

Solution Summary

Using the mean-Variance criteria, solution identifies whether one security dominates or whether there is no dominance for each possible pair of securities.

$2.19