Risk and Return to Investment in Five Emerging Nations: A Mathematica Simulation
- *Corresponding Author:
- Mohammad R. Safarzadeh
Professor, Economics Department
California State Polytechnic University
Pomona, CA 91768, USA
E-mail: [email protected]
Received Date: March 24, 2012; Accepted Date: June 28, 2012; Published Date: July 01, 2012
Citation: Safarzadeh MR, Nazarian FI (2012) Risk and Return to Investment in Five Emerging Nations: A Mathematica Simulation. J Stock Forex Trad 1:102. doi: 10.4172/2168-9458.1000102
Copyright: © 2012 Safarzadeh MR, et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
This paper compares the Mathematica simulations of optimum allocation ratios derived from the application of Modern Portfolio Theory to historical data of five emerging nations with the actual allocations as presented in MSCI BRIC Index Fund (BKE) and Emerging Markets Index Fund (EEM). The paper finds that the BKE and EEM allocations of funds are not consistent with the optimum allocations of funds derived from the Mathematica simulation whether the risk of exchange rate volatility is factored in or not.