Question

Assume that the risk free rate is 3% and the expected return on the FTSE100 is...

Assume that the risk free rate is 3% and the expected return on the FTSE100 is 9%. The standard deviation of the market index is 23%. If you manage a pension fund for your company and would like to achieve the expected return of 5%, how should the company’s pension fund be structured in order to achieve this expected return? What is the risk of this portfolio?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

­SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The expected return on the market is 12%; the risk-free rate is 3%; the beta of...
The expected return on the market is 12%; the risk-free rate is 3%; the beta of your portfolio is 1.17; and the standard deviation of your portfolio is 17%. Which of the following statements is true? A. The expected return on your portfolio is 1.17 times 12% B. The reward to risk ratio for your portfolio is 1.17/0.17. C. The market risk premium is 9%. D. There is not enough information to determine the expected return on your portfolio.
1.2. The risk-free rate is 6%, the expected return on the market portfolio is 14%, and...
1.2. The risk-free rate is 6%, the expected return on the market portfolio is 14%, and the standard deviation of the return on the market portfolio is 25%. Consider a portfolio with expected return of 16% and assume that it is on the efficient frontier. 1.2.1. Calculate the beta of this portfolio (4). 1.2.2. Calculate the standard deviation of its return (5).
Suppose that the risk-free rate is 6 percent and the expected return on the market portfolio...
Suppose that the risk-free rate is 6 percent and the expected return on the market portfolio is 15 percent. An investor with $1.5 million to invest wants to achieve a 25 percent return on a portfolio combining the risk-free asset and the market portfolio. Calculate how much this investor would need to borrow at the risk-free rate in order to establish this target expected return. Provide your final answers up to two decimal points.
Suppose that the risk-free rate is 6 percent and the expected return on the market portfolio...
Suppose that the risk-free rate is 6 percent and the expected return on the market portfolio is 15 percent. An investor with $1.5 million to invest wants to achieve a 25 percent return on a portfolio combining the risk-free asset and the market portfolio. Calculate how much this investor would need to borrow at the risk-free rate in order to establish this target expected return. Provide your final answers up to two decimal points.
Suppose that the risk-free rate is 6 percent and the expected return on the market portfolio...
Suppose that the risk-free rate is 6 percent and the expected return on the market portfolio is 15 percent. An investor with $1.5 million to invest wants to achieve a 25 percent return on a portfolio combining the risk-free asset and the market portfolio. Calculate how much this investor would need to borrow at the risk-free rate in order to establish this target expected return. Provide your final answers up to two decimal points
If the expected rate of return on the market portfolio is 14% and the risk free...
If the expected rate of return on the market portfolio is 14% and the risk free rate is 6% find the beta for a portfolio that has expected rate of return of 10%. What assumptions concerning this portfolio and or market condition do you need to make to calculate the portfolio’s beta? b. what percentage of this portfolio must an individual put into the market portfolio in order to achieve an expected return of 10%?
You manage a risky portfolio with an expected rate of return of 20% and a standard...
You manage a risky portfolio with an expected rate of return of 20% and a standard deviation of 36%. The T-bill rate is 5%. Your client chooses to invest 60% of a portfolio in your fund and 40% in an essentially risk-free money market fund. What are the expected return and standard deviation of the rate of return on his portfolio? (Do not round intermediate calculations. Round "Standard deviation" to 2 decimal places.)
Assume the CAPM holds. The risk-free rate is 5% and the market portfolio expected return is...
Assume the CAPM holds. The risk-free rate is 5% and the market portfolio expected return is 15% with a standard deviation of 20%. An asset has an expected return of 16% and a beta of 0.8. a) Is this asset return consistent with the CAPM? If not, what expected return is consistent with the CAPM? b) How could an arbitrage profit be made if this asset is observed? c) Would such a situation be expected to exist in the longer...
You manage a risky portfolio with an expected rate of return of 19% and a standard...
You manage a risky portfolio with an expected rate of return of 19% and a standard deviation of 34%. The T-bill rate is 8%. Your client chooses to invest 70% of a portfolio in your fund and 30% in an essentially risk-free money market fund. What is the expected return and standard deviation of the rate of return on his portfolio? Expected Return= x% Standard deviation = y%
A portfolio that combines the risk-free asset and the market portfolio has an expected return of...
A portfolio that combines the risk-free asset and the market portfolio has an expected return of 7.4 percent and a standard deviation of 10.4 percent. The risk-free rate is 4.4 percent, and the expected return on the market portfolio is 12.4 percent. Assume the capital asset pricing model holds. What expected rate of return would a security earn if it had a .49 correlation with the market portfolio and a standard deviation of 55.4 percent?  Enter your answer as a percent...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT