Data comm

Topics: Investment, Risk aversion, Risk Pages: 2 (427 words) Published: November 8, 2013
1.There are 2 different types of switching, circuit switching and packet switching. a.Circuit Switching – One wire connects multiple destinations through communication nodes which creates a dedicated channel with full bandwidth available for communication. b.Packet Switching – Groupings of transmitted data are converted into smaller packets that are sent over a network. The transmission resources are allocated as needed and a connection exists only as long as the transmission is sent.

2.Packetization is the bundling of data being sent into smaller packets in such a way that they can be sent, delivered, and

Looking at the statistics of the two stocks, does the risk-return trade-off hold?

Yes, looking at the two stocks the risk-return trade-off holds, because as the variance decreases, E(rp) also decreases. Meaning that as risk increases, potential return also increases.

Which Combinations should you avoid? Why?

Looking at the Investment Opportunity set, it’s clear that all points below the x axis should be avoided. Each point below the x axis shares the same amount of risk as points above it, but yields a lower return, meaning for the same risk there is less reward. These combinations should be avoided.

Look at the amount you invested in stock 1 and stock 2 at the beginning of the semester. Assume, for the moment, that these stocks are your entire portfolio. What can you say about the efficiency of the combination you chose?

( For this question we just have to compare our weights in our original investments to the optimal weight for the two) Good efficiency between Wa0, Wg1 and Wa.5, Wg.5 , poor for anything between Wa.5, Wg.5 and Wa1, Wg0.

Which combination would deliver the least amount of risk?

The minimum variance portfolio for the two stocks says to put 33% into Apple, and 67% into Google. This combination yields the least amount of risk.

How much money should a risk averse investor with 1,000,000 wealth put in each...
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