GBD Solution Please??? – MGT411 Money & Banking – Solution VU

Risk Preference
Question Description
SEMESTER SPRING 2023

Money & Banking (MGT411)

GDB No. 1

Due Date: May 26, 2023 Marks: 5

Learning Objective:

The objective of this question is to enable the students to know the risk preferences of investors subject to risk levels.

Discussion Question:

Suppose you are working as an Investment advisor in XYZ Company. Your core job is to make investment portfolios as per the requirement of your clients. One day two friends, Ahmad and Hamid, walked into your office to seek investment advice. The risk appetite of both friends is different. Ahamd is a risk-averse investor, while Hamid is risk-neutral.

Investment

Expected Value

Standard Deviation

Portfolio X

750

20

Portfolio Y

1000

20

Portfolio Z

1000

30

Requirement:

Based on investment opportunities given in the table above, you are required to determine which investment is best for Ahamd and which investment is best for Hamid, considering their risk appetite.

Make your selection of investment with logical reasoning.

1. ya koi solve kr do