求助finance问题，有问题也有答案，但是不太懂

1.A broker has advised you not to invest in oil industry shares because they have high standard deviations. Is the broker‟s advice sound for a risk-averse investor like yourself? Why or why not?
The wide fluctuations in the price of oil shares do not indicate that these are a poor investment. If an oil share is purchased as part of a well-diversified portfolio, only its contribution to the risk of the entire portfolio matters. This contribution is measured by systematic risk or beta. Since price fluctuations in oil shares reflect diversifiable plus non-diversifiable risk, observing the standard deviation of price movements is not an adequate measure of the appropriateness of adding oil shares to a portfolio.
2. Explain what is meant by an optimal portfolio. what are the conditions that must exist for only one optimal portfolio to exist? Do you think these conditions are likely to persist in the real word?
The optimal portfolio is the feasible portfolio that, in conjunction with the risk free asset, can deliver the highest expected return for the lowest level of risk. It is the portfolio that has the highest reward to risk ratio of every possible capital allocation line. The conditions are, riskless borrowing and lending, everyone having the same views on expected returns and risk of all assets, no transaction costs, the existence of a risk free asset. Although these are not likely to be applicable in the real world, the theory provides many insights into how assets are priced.

问题的答案知识点看不太明白，不理解，求大家帮忙解释一下，万分感谢

1. A high standard deviation asset (oil in this case) typically means high risk, but the investor can’t ignore it just for this reason. If you have a portfolio of assets and the oil price is negatively correlated to the portfolio, having the oil as part of your portfolio would actually reduce your portfolio risk (the sigma). This is called diversification, see MPT.

2. Optimal portfolio means by adjusting your assets holding proportion you get the best return with the lowest risk. Every investor tries to calculate this optimal allocation for their portfolio but the model being used to calculate such optimal depends on several assumptions, as mentioned above in your post. Pick the assumption of the existence of risk free asset: even government bonds can default these days and the risk free rate can be highly stochastic.

您好，之前你解释的我看明白了，非常感谢，还有两道题不知道能不能请你看看
3. Consider the following quotation from a leading investment manager: „The shares of Southern plc have traded close to £12 for most of the past three years. Since Southern‟s equity has demonstrated very little price movement, it has a low beta. Jungle Instruments, on the other hand, has traded as high as £150 and as low as its current £75. Since JI‟s equity has demonstrated a large amount of price movement, the stock has a very high beta.‟ Do you agree with this analysis?

If we assume that the market has not stayed constant during the past three years, then the lack in movement of Southern plc’s share price only indicates that the equity either has a standard deviation or a beta that is very near to zero. The large amount of movement in Jungle Instrument’ share price does not imply that the firm’s beta is high. Total volatility (the price fluctuation) is a function of both systematic and unsystematic risk. The beta only reflects the systematic risk. Observing the standard deviation of price movements does not indicate whether the price changes were due to systematic factors or firm specific factors. Thus, if you observe large share price movements like that of TI, you cannot claim that the beta of the equity is high. All you know is that the total risk of TI is high.

4.Is it possible that a risky asset could have a beta of zero? Explain. Based on the CAPM, what is the expected return on such an asset? Is it possible that a risky asset could have a negative beta? What does the CAPM predict about the expected return on such an asset? Can you give an explanation for your answer?

Yes. It is possible, in theory, to construct a zero beta portfolio of risky assets whose return would be equal to the risk-free rate. In this case, a zero beta indicates a zero correlation with the market portfolio. It is also possible to have a
negative beta; the return would be less than the risk-free rate. A negative beta asset would carry a negative risk premium because of its value as a diversification instrument. This is an indication of negative correlation with the market portfolio.

万分感谢

If you make yourself familiar with the notion that Beta simply means “the correlation between the market return and an individual asset return” then the two questions above are just trying to reinforce this idea. Although strictly speaking, its not the correlation hence people call it the sensitivity.

For 3, think about what it means by correlation. You need two sets of historical data in order to conclude its correlation, having just one (the share price in this case) does not tell you anything about it. You will also need to know the historical market return.

I don’t think I can make 4) anymore clearer, it is as simple as you can ever get.

optimal portfolio is market portfolio

lz不是很熟悉beta,systematic risk, and non-systematic risk这些概念。

把这几个概念弄清楚了，这几个问题就迎刃而解了。

从lz问这问题，感觉lz没有好好读书！
如果是富二代就算了，如果不是，可那是父母的辛苦钱啊！

请问有business law，business ethics的代考吗？学校很松，重金回报求帮忙 q q2812443370