Professional Development in Finance: Week Three

17.6％）。
•计算并报告a）股票市场的预期回报率和b）夏普比率

•使用此计算来估计60岁组的风险规避。假使，假设

1个
2
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2
。您可以四舍五入

2
The 2020 survey results implied that the 50 year old respondents were indifferent between the
risk-free asset and the stock market when the stock market had a risk premium of 4.55%.
• Compute and report the corresponding expected return of the market under this
condition.
• Use this calculation to estimate the risk aversion of the 50 year old group. Again, you
can round to the nearest whole number.
The insurance group has asked our office to provide an effective graphic to include in the
project’s final report to the executive marketing and advisory offices. This figure needs to
illustrate how the two groups’ required expected returns differ as the standard deviation of
returns increases.
• Use investors’ utility function and your knowledge about certainty equivalence to
compute the necessary expected returns for standard deviations of 0%, 5%, 10%, and
15%.
• Report the risk return combinations in a clearly labeled table.
• Plot the two groups’ risk return combinations in a clearly labeled figure. For this
particular figure, please illustrate the investment preferences using two lines in the
graph. Include labels for the return coordinates of each data point.
o Remember to clearly label the data series for any potential audiences.
Include a brief (4-5 sentences) paragraph explaining the contents of the graph and what
the targeted audience (senior staff from the marketing and advising offices) should take
away. Be sure to explain what is meant by certainty equivalence and the risk preference
parameters you include in your analysis. Give the audience an intuitive explanation of
what the values of the risk parameters imply. Tell the story.
Please make sure that you append all data, spreadsheets, and relevant calculations and that:
o Any figures you include in your report are clearly labeled, with easy-to-read axes
and legends.
o Your spreadsheet, once opened, is easy to navigate. Series and any worksheet
tabs should be clearly and appropriately labeled.
o You include one or more clearly labeled worksheets for any calculations
party can see what computation corresponds to any part of the assignment.
o Ideally, your labeling and annotations should be sufficiently clear that any
supervisor can replicate all of your results based on the workbook you submit
within 5-10 minutes.
o You correctly cite any sources you used in forming your analysis.
When submitting to latte, make sure that click submit and you receive a confirmation email
that your work has been submitted.

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