Question

You have just deposited $10,000 into your TDAmeritrade account with the intent of creating a two-asset portfolio. You have already decided to buy Stock A, which has an expected rate of return of 15% and a standard deviation of 21%. The second asset that you will add to the portfolio is an ETF that tracks treasury bonds. This ETF has an expected rate of return equal to 5% and a standard deviation of 2%. If your goal is to allocate your funds across the two assets to earn an expected portfolio return of 10%, then how much money should you allocate to each security?

（**While you may use Excel for your analysis,
please kindly type and show me each step )**

Answer #1

You have just deposited $10,000 into your TDAmeritrade account
with the intent of creating a two-asset portfolio. You have already
decided to buy Stock A, which has an expected rate of return of 15%
and a standard deviation of 21%. The second asset that you will add
to the portfolio is an ETF that tracks treasury bonds. This ETF has
an expected rate of return equal to 5% and a standard deviation of
2%. If your goal is to allocate...

You invest $10,000 in a complete portfolio. The complete
portfolio is composed of a risky asset with an expected rate of
return of 20% and a standard deviation of 21% and a treasury bill
with a rate of return of 5%. How much money should be invested in
the risky asset to form a portfolio with an expected return of
8%?

You invest $1,700 in a complete portfolio. The complete
portfolio is composed of a risky asset with an expected rate of
return of 18% and a standard deviation of 25% and a Treasury bill
with a rate of return of 9%. __________ of your complete portfolio
should be invested in the risky portfolio if you want your complete
portfolio to have a standard deviation of 12%.

You invest $1,800 in a complete portfolio. The complete
portfolio is composed of a risky asset with an expected rate of
return of 12% and a standard deviation of 15% and a Treasury bill
with a rate of return of 4%. ____ of your complete portfolio should
be invested in the risky portfolio if you want your complete
portfolio to have a standard deviation of 9%.

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%...

You invest $100 in a complete portfolio. The complete portfolio
is composed of a risky asset with an expected rate of return of 12%
and a standard deviation of 10% and a treasury bill with a rate of
return of 5%.
What would be the weight of your investment allocated to the
risk-free asset if you want to have a portfolio standard deviation
of 9%? (2 points)
How could you use these two investments to generate an expected
return of...

You are constructing a portfolio from two assets. The first
asset has an expected return of 7.7% and a standard deviation of
7.8%. The second asset has an expected return of 10.2% and a
standard deviation of 12.6%. You plan to invest 41% of your money
in the first asset, and the rest in asset 2. If the assets have a
correlation coefficient of -0.61, what will the standard deviation
of your portfolio be?

You must allocate your wealth between two securities. Security 1
offers an expected return of 10% and has a standard deviation of
30%. Security 2 offers an expected return of 15% and has a standard
deviation of 50%. The correlation between the returns on these two
securities is 0.25.
a. Calculate the expected return and standard deviation for each
of the following portfolios, and plot them on a graph:
% Security
1
% Security
2
E(R)
Standard
Deviation
100
0...

You are creating a portfolio of two stocks. Pear Inc. has
expected return of 15% and standard deviation of 30%. InstaCafe
Inc. has expected return of 13% and standard deviation of 40%. The
two stocks' covariance is -0.036 and the risk free rate is 2%.
What percentage of the Optimal Risky Portfolio will be invested
in Pear Inc?
Provide your answer in percent rounded to two decimals,
omitting the % sign.

Risky Asset A and Risky Asset B are combined so that the new
portfolio consists of 70% Risky Asset A and 30% Risky Asset
B. If the expected return and standard deviation of
Asset A are 0.08 and 0.16, respectively, and the expected return
and standard deviation of Asset B are 0.10 and 0.20, respectively,
and the correlation coefficient between the two is 0.25: (13
pts.)
What is the expected return of the new portfolio consisting of
Assets A & B...

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