Question

An investor invests 40% of his  wealth in a risky asset with an expected rate of return...

An investor invests 40% of his  wealth in a risky asset with an expected rate of return of 15% and a variance of 4% and 60% in a treasury bill that pays 6%. The expected rate of return and standard deviation of her portfolio are closest to __________ and __________, respectively.

A.8.0%, 12%

B. 9.6%, 8%

C. 9.6%, 10%

D. 11.4%, 12%

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
28. An investor invests 30% of his wealth in a risky asset with an expected rate...
28. An investor invests 30% of his wealth in a risky asset with an expected rate of return of 0.15 and a variance of 0.04 and 70% in a T-bill that pays 6%. His portfolio's expected return and standard deviation are __________ and __________, respectively. Answer Below: E(r P) = 0.3(15%) + 0.7(6%) = 8.7%; sP = 0.3(0.04)^1/2 = 6%. Question: Could someone please explain why the sP formula is ^1/2? All the other formulas I have seen are ^2....
Assume that an investor invests all of her wealth ($1000) in a risky portfolio with expected...
Assume that an investor invests all of her wealth ($1000) in a risky portfolio with expected return of 19.38% and standard deviation of 3.12%. She borrows an additional $377 dollars at the risk-free rate of 2.82%, which she also invests in the risky portfolio. The expected standard deviation for her complete portfolio = %
Calculate standard deviation Your investment has a 40% chance of earning a 15% rate of return,...
Calculate standard deviation Your investment has a 40% chance of earning a 15% rate of return, a 50% chance of earning a 10% rate of return, and a 10% chance of losing 3%. What is the standard deviation of this investment? A. 8.43% B. 5.14% C. 9.29% D. 7.59% Expected return and volatility of a portfolio An investor invests 70% of her wealth in a risky asset with an expected rate of return of 15% and a variance of 5%,...
An investor chooses to invest 60% of a portfolio in a risky fund and 40% in...
An investor chooses to invest 60% of a portfolio in a risky fund and 40% in a T-bill fund. The expected return of the risky portfolio is 17% and the standard deviation is 27%. The T-bill rate is 7%. What is the Sharpe ratio of the risky portfolio and the investor’s overall portfolio? Suppose the investor decides to invest a proportion (y) of his total budget in the risky portfolio so that his overall portfolio will have an expected return...
You manage a risky portfolio with expected rate of return of 15% and standard deviation of...
You manage a risky portfolio with expected rate of return of 15% and standard deviation of 32%. The risk free rate is 3%. A client chooses to invent 60% of her wealth into your portfolio and 40% into a t-bill market fund. What is the reward to variability ratio (sharpe ratio) of your clients overall portfolio?
You invest $100 partly in a risky asset with an expected rate of return of 11%...
You invest $100 partly in a risky asset with an expected rate of return of 11% and a standard deviation of 21% and partly in T-bills with a yield of 4.5%. What percentages of your money must be invested in the risk-free asset and the risky asset, respectively, to form a portfolio with a standard deviation of 8.0%?
You invest 40% in a risky portfolio, and 60% in a treasury bill. The risky portfolio...
You invest 40% in a risky portfolio, and 60% in a treasury bill. The risky portfolio has an expected return of 15% and a standard deviation of 25%. The treasury bill pays 7%. Suppose that your risky portfolio includes the following investments in the given proportions: Stock A 30%Stock B 30%Stock C 30%Stock D 10%(a)(3 points) What are the investment proportions in the complete portfolio, including stock A, B, C, D and the Treasury bill? (b)(3 points) What is the...
ou invest $1,000 in a risky asset with an expected rate of return of 0.17 and...
ou invest $1,000 in a risky asset with an expected rate of return of 0.17 and a standard deviation of 0.40 and a T-bill with a rate of return of 0.04. What percentages of your money must be invested in the risky asset and the risk-free asset, respectively, to form a portfolio with an expected return of 0.11? Select one: a. 53.8% and 46.2% b. 75% and 25% c. 62.5% and 37.5% d. 46.2% and 53.8% e. Cannot be determined.
The expected return on the risky portfolio is 15%. The risk-free rate is 5%. The standard...
The expected return on the risky portfolio is 15%. The risk-free rate is 5%. The standard deviation of return on the risky portfolio is 22%. Tina constructed a complete portfolio from this risky portfolio and the risk-free asset. If her portfolio has an expected return of 12%, what is the standard deviation of her complete portfolio?
Kelly Smart manages a risky portfolio with an expected rate of return of 24% and a...
Kelly Smart manages a risky portfolio with an expected rate of return of 24% and a standard deviation of 35%. The T-bill rate is 5%. Kelly's client, Tom Tenge, decides to invest in her risky portfolio a proportion (y) of his total investment budget so that his overall portfolio will have an expected return of 16%. The remainder of his budget (1-y) is invested in T-bill. What is the standard deviation of Tom's overall portfolio?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT