Question

The ISR Equity Fund has an expected return E[r] of 17.970% and a standard deviation σ...

The ISR Equity Fund has an expected return E[r] of 17.970% and a standard deviation σ of 21%. The BND Bond Fund has and expected return E[r] of 2.150% and a standard deviation σ of 9%. The correlation coefficient (ρ) is 0.74. A portfolio comprised of 83% ISR and 17% BND would have an expected return of % and a standard deviation of %

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Return of ISR Equity Fund(RA) = 17.970%

Weight of ISR Equity Fund(WA) = 83%

Return of BND Bond (RB) = 2.150%

Weight of BND Bond(WB) = 17%

a). Expected return on Portfolio = WA*RA + WB*RB

= (0.83)(17.970%) + (0.17)(2.150%)

= 14.9151% + 0.3655%

= 15.281%

b). Calculating Standard deviation of Portfolio:-

Standard deviation = 18.59%

If you need any clarification, you can ask in comments.     

If you like my answer, then please up-vote as it will be motivating     

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 EQT Equity Fund has an expected return E[r] of 10.380% and a standard deviation σ...
The EQT Equity Fund has an expected return E[r] of 10.380% and a standard deviation σ of 18%. The BND Bond Fund has and expected return E[r] of 6.290% and a standard deviation σ of 9%. The correlation coefficient (ρ) is 0.97. A portfolio comprised of 46% EQT and 54% BND would have an expected return of  % and a standard deviation of  %
A stock fund has an expected return of 15% and a standard deviation of 25% and...
A stock fund has an expected return of 15% and a standard deviation of 25% and a bond fund has an expected return of 10% and a standard deviation of 10%. The correlation between the two funds is 0.25. The risk free rate is 5%. What is the (a) expected return and (b) standard deviation of the portfolio with 70% weight in the stock portfolio and 30% weight in the bond portfolio?
You have a stock fund with an expected return of 12% and a standard deviation of...
You have a stock fund with an expected return of 12% and a standard deviation of 22%, a corporate bond fund with an expected return of 6% and a standard deviation of 18% and the risk free rate is 4%. The correlation between the stock and bond funds is 0.15. What is the expected return of the optimal portfolio? Answer in percentage, with one decimal place. Answer:
Q1) A stock fund has an expected return of 15% and a standard deviation of 25%...
Q1) A stock fund has an expected return of 15% and a standard deviation of 25% and a bond fund has an expected return of 10% and a standard deviation of 10%. The correlation between the two funds is 0.25. The risk free rate is 5%. What is the (a) expected return and (b) standard deviation of the portfolio with 70% weight in the stock portfolio and 30% weight in the bond portfolio? Q2) The variance of Stock A is...
he W Equity portfolio has a standard deviation of returns of 8. The R Bond portfolio...
he W Equity portfolio has a standard deviation of returns of 8. The R Bond portfolio has a standard deviation of returns of 6. If the Covariance of these portfolio is 5 what is this portfolio's coefficient of correlation?
E[R] and σ(R) and Standard Deviation of a Portfolio. Assume that ABC is selling for $10...
E[R] and σ(R) and Standard Deviation of a Portfolio. Assume that ABC is selling for $10 per share, XYZ is selling for $20 per share, and XYZ has an expected return of 8% and a standard deviation of 30%. (a) Over the past four years, ABC has returned 10%, 0%, -5%, and 15%. Assuming these past returns are representative of what ABC might return in the future, what are ABC’s expected return and standard deviation? (b) You decide to buy...
Refer to the table below: 3 Doors, Inc. Down Co. Expected return, E(R) 17 % 7...
Refer to the table below: 3 Doors, Inc. Down Co. Expected return, E(R) 17 % 7 % Standard deviation, σ 32 16 Correlation .19 Using the information provided on the two stocks in the table above, find the expected return and standard deviation on the minimum variance portfolio Expected return:____________% Standard deviation:______________%
Calculate the expected return andstandard deviation of a portfolio invested in the following two risky assets.
a) Calculate the expected return andstandard deviation of a portfolio invested in the following two risky assets.SecurityWE(r)σA40%1018.63B60%58.27Correlation coefficient ρ= - 0.49b) Calculate the expected return of a complete portfolio invested equally in the risky portfolio calculated previously (a) and risk-free asset with 4% return. Compare your results?
Asset E(R) Std. deviation A 17% 50% Market (M) 10% 20% Above is the expected return...
Asset E(R) Std. deviation A 17% 50% Market (M) 10% 20% Above is the expected return and standard deviation of a stock A and the market portfolio. The correlation coefficient between A and the market portfolio (M) is 0.5. The risk-free rate is 4% Based on CAPM, stock A is ____________ because it offers an alpha of ____________. A. underpriced; 7% B. underpriced; 5.5% C. overpriced; 5.5% D. underpriced; 0.5% E. overpriced; -0.5%
True or False? -- Stock A has an expected return of 7% and a standard deviation...
True or False? -- Stock A has an expected return of 7% and a standard deviation of 8%. Stock B has an expected return of 9% and a standard deviation of 10%. If the portfolio that consists of 50% stock A and 50% stock B has a standard deviation of 8%, the correlation coefficient of stocks A and B must be 0.88.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT