Question

Mr. Rakesh Jhunjhunwala has created a portfolio consisting of a stock and a risk-free asset. The...

Mr. Rakesh Jhunjhunwala has created a portfolio consisting of a stock and a risk-free asset. The stock’s expected return is 16% and beta is 1.2. The risk-free asset earns 5% rate of return. Suppose the beta of his portfolio is 0.75, what are the weights of the stock and the risk-free asset in his portfolio?
0 I do not want to answer this Question
1 The weight of the stock is 30% and the weight of the risk-free asset is 70%.
2 The weight of the stock is 37% and the weight of the risk-free asset is 63%.
3 The weight of the risk-free asset is 45% and the weight of the stock is 55%.
4 The weight of the risk-free asset is 37% and the weight of the stock is 63%.
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
Stock A has a beta of 1.2 and an expected return of 10%. The risk-free asset...
Stock A has a beta of 1.2 and an expected return of 10%. The risk-free asset currently earns 4%. If a portfolio of the two assets has an expected return of 6%, what is the beta of the portfolio? A) 0.3 B) 0.4 C) 0.5 D) 0.6 E) 0.7
You have one risk-free asset and one risky stock in your portfolio. The risk-free asset has...
You have one risk-free asset and one risky stock in your portfolio. The risk-free asset has an expected return of 5.8 percent. The risky stock has a beta of 1.8 and an expected return of 12.3 percent. What's the expected return on the portfolio if the portfolio beta is .958?
You have $110,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free...
You have $110,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 10 percent and that has only 74 percent of the risk of the overall market. If X has an expected return of 30 percent and a beta of 2.0, Y has an expected return of 20 percent and a beta of 1.2, and...
Jo Taylor, a portfolio manager, is putting together a portfolio with two different assets. Stock A...
Jo Taylor, a portfolio manager, is putting together a portfolio with two different assets. Stock A has a beta of 16 and Stock B has a beta of 1.50. The risk free return is 3.5% and the market risk premium is 5.5%. What is the market expected rate of return? What is the expected rate of return and the beta of a portfolio consisting of 40% Stock A and 60% Stock B? What is the expected rate of return and...
You have $110,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free...
You have $110,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 10 percent and that has only 74 percent of the risk of the overall market. If X has an expected return of 30 percent and a beta of 2.0, Y has an expected return of 20 percent and a beta of 1.2, and...
5) A portfolio that combines the risk free asset and the market portfolio has an expected...
5) A portfolio that combines the risk free asset and the market portfolio has an expected return of 7% and a standard deviation of 10%. The risk free rate is 4%, and the market returns (expected) is 12%. What expected return would a security earn if it had a correlation of 0.45 ewth the market portfolio and a standard deviation of 55%.? Suppose the risk free rate is 4.8% and the market portfolio has an expected return of 11.4%. the...
A stock has a beta of 1.20 and an expected return of 14 percent. a risk-free...
A stock has a beta of 1.20 and an expected return of 14 percent. a risk-free asset currently earns 3 percent. What is the expected return on a portfolio that is equally invested in the two assets? ( do not round intermediate calculations and round your answer to 2 decimal places) If a portfolio of the two assets has a beta of .72 ,what are the portfolio weights?( do not round intermediate calculations and round your answer to 4 decimal...
(please fast!!) You have $100,000 to invest in a portfolio containing Stock A and a risk-free...
(please fast!!) You have $100,000 to invest in a portfolio containing Stock A and a risk-free asset (T-bill). Stock A has an expected return of 13 percent and a beta of 1.5. Whereas, the risk-free asset has an expected return of 4 percent. If you plan to create a portfolio that is as equally as risky as the market, the $ amount that you will need to allocate to the risk free asset within this portfolio is   _______ .
You plan to form a portfolio that contains only the risk free asset and stock A....
You plan to form a portfolio that contains only the risk free asset and stock A. The risk free rate is 2%. The expected return and the standard deviation of stock A's return are 10% and 15% respectively. The expected return of your portfolio is 8%. Find out the standard deviation of the portfolio. 7.5% 12% 11.25% 15% 10%
The market is expected to yield 12% and the risk free rate is 2%. You currently...
The market is expected to yield 12% and the risk free rate is 2%. You currently hold a portfolio with a beta of 0.75 worth $25,000. You want to invest in another portfolio with a beta of 2.9. How much will you have to invest in the new risky asset so that the resulting portfolio will have an expected return of 16%?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT