Question

There are 2 investment -- a risk-free security that returns 2% and a risky asset that has expected return of 10% and standard deviation of 18%.

1). What are the weights of the complete portfolio that has an 8% expected return?

2). What is the standard deviation of that portfolio?

3). If the portfolio is valued at $100,000, how much do you invest in the risk-free security and how much do you invest in the risky asset?

Answer #1

security
beta
Standard deviation
Expected return
S&P 500
1.0
20%
10%
Risk free security
0
0
4%
Stock d
( )
30%
13%
Stock e
0.8
15%
( )
Stock f
1.2
25%
( )
5) A complete portfolio of $1000 is composed of the risk free
security and a risky portfolio, P, constructed with 2 risky
securities, X and Y. The optimal weights of X and Y are 80% and 20%
respectively. Given the risk free rate of 4%....

Consider the following information about a risky portfolio that
you manage and a risk-free asset: E(rP) = 12%,
σP = 22%, rf= 4%.
a. Your client wants to invest a proportion of
her total investment budget in your risky fund to provide an
expected rate of return on her overall or complete portfolio equal
to 7%. What proportion should she invest in the risky portfolio,
P, and what proportion in the risk-free asset? (Do
not round intermediate calculations. Round your...

1.)In a universe with just two assets, a risky asset and a
risk-free asset, what is the slope of the Capital Allocation Line
if the Expected return of the risky asset is 12.16% and the
standard deviation of the returns of the risky asset is 19.25%. The
return on the risk-free asset is 3.88%
2.)Peter Griffin calculates that his portfolio's risk, as
measured by the standard deviation, is 21.96%. His portfolio is
made up of many stocks from just two...

Consider the following information about a risky portfolio that
you manage and a risk-free asset: E(rP) = 14%,
σP = 17%, rf = 5%.
a. Your client wants to invest a proportion of her
total investment budget in your risky fund to provide an expected
rate of return on her overall or complete portfolio equal to 6%.
What proportion should she invest in the risky portfolio,
P, and what proportion in the risk-free asset? (Do
not round intermediate calculations. Round...

Consider the following information about a risky portfolio that
you manage and a risk-free asset: E(rP) = 16%, σP = 20%, rf = 4%.
a. Your client wants to invest a proportion of her total investment
budget in your risky fund to provide an expected rate of return on
her overall or complete portfolio equal to 5%. What proportion
should she invest in the risky portfolio, P, and what proportion in
the risk-free asset? (Do not round intermediate calculations. Round...

How a risk neutral investor allocates her asset between a risk
free security and a risky asset. The risk-free return is 5% and the
return of the risky asset is 7% with a standard deviation of
4%.

1. Suppose you have a portfolio that is 70% in the risk-free
asset and 30% in a stock. The stock has a standard deviation of
0.30 (i.e., 30%). What is the standard deviation of the portfolio?
A. 0.30 (i.e., 30%) B. 0.09 (i.e., 9%) C. 0.21 (i.e., 21%) D.
0
2. You have a total of $100,000 to invest in a portfolio of assets.
The portfolio is composed of a risky asset with an expected rate of
return of 15%...

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?

An investor can choose to allocate her investment into a risky
portfolio and the risk-free rate. The risky portfolio has an
expected return of 18.3 percent and a standard deviation of 21.0
percent. The risk-free rate is 8.4 percent. The investor targets a
complete portfolio with an expected return of 14 percent. The
standard deviation of this complete portfolio is

Design a complete portfoilio with the Risky asset S and risk
free asset that yields the expected return of 10%. What is the
weight you invest on Asset S?
Asset S: E(r)=15% Standard Deviation=20%
Risk free: E(r)= 6%
A. 44.4
B.37.9
C.50.6
D. 41.09

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