Question

You are building a risky portfolio for a client. You will combine two risky funds. The...

You are building a risky portfolio for a client. You will combine two risky funds. The first fund has a beta of 0.6, while the second fund has a beta of 0.9. You will invest 0.32% in the first fund, and the rest in the second fund. The expected market return is 0.156, and the risk free rate is 0.025. What is the expected return on the portfolio you are building?

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
You manage a risky portfolio with an expected rate of return of 19% and a standard...
You manage a risky portfolio with an expected rate of return of 19% and a standard deviation of 34%. The T-bill rate is 8%. Your client chooses to invest 70% of a portfolio in your fund and 30% in an essentially risk-free money market fund. What is the expected return and standard deviation of the rate of return on his portfolio? Expected Return= x% Standard deviation = y%
You are managing a risky portfolio with an expected return of 15%, a variance of 0.0784,...
You are managing a risky portfolio with an expected return of 15%, a variance of 0.0784, and a beta of 1.4. Suppose that the T-bill rate is 5% and the S&P500 stock index (as the market index) has an expected return of 10% and a variance of 0.04. Your client chose to invest 80% of her portfolio in your fund and the rest in a T-bill money market fund. What is the Treynor ratio of your client’s portfolio? A. 0.3571...
You manage a risky portfolio with an expected rate of return of 20% and a standard...
You manage a risky portfolio with an expected rate of return of 20% and a standard deviation of 36%. The T-bill rate is 5%. Your client chooses to invest 60% of a portfolio in your fund and 40% in an essentially risk-free money market fund. What are the expected return and standard deviation of the rate of return on his portfolio? (Do not round intermediate calculations. Round "Standard deviation" to 2 decimal places.)
Consider the following information about a risky portfolio that you manage and a risk-free asset: E(rP)...
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...
Consider the following information about a risky portfolio that you manage and a risk-free asset: E(rP)...
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...
You manage a risky portfolio with an expected rate of return of 18% and a standard...
You manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 28%. The T-bill rate is 8%. Your client choose s to invest 70% of a portfolio in your fund and 30% in an essentially risk-free money market fund. What is the expected return and standard deviation of the rate of return on his portfolio? Do not round intermediate calculations. Round "standard deviation to 1 decimal place. Rate of Return Expected return _______?_%___...
You manage a risky portfolio with expected rate of return of 9% and standard deviation of...
You manage a risky portfolio with expected rate of return of 9% and standard deviation of 13%. Risk free rate of return is 3%. a. What are the characteristics of feasible investment portfolios for your client? (what are the possible risk and return that you can create?) Identify this using a graph. What is this line called? b. A client of yours has a utility function of U=E(r)-4Var(r) and 10000 to invest. How much should he invest in the risk-free...
. There are two investment funds. One of them is a passive portfolio, meaning that it...
. There are two investment funds. One of them is a passive portfolio, meaning that it mimics the S&P 500. The passive portfolio generates has an expected return of 13% with a standard deviation of 25%. In contrast, you are the manager of an active portfolio, which generates an expected return of 18% and has a standard deviation of 28%. Note that the risk-free rate is 8%. A) Your client is currently holding 70% of their total wealth in your...
you want to create a portfolio equally as risky as the market, and you have $100,000...
you want to create a portfolio equally as risky as the market, and you have $100,000 to invest. In your portfolio, you want to invest in Stock A, Stock B, and a risk-free asset. You want to invest $30,000 in Stock A and the beta of Stock A is 0.80. The beta of Stock B is 30. What is the market beta? What is the beta of the risk-free asset? How much should you invest in Stock B and the...
You want to create a portfolio equally as risky as the market, and you have $100,000...
You want to create a portfolio equally as risky as the market, and you have $100,000 to invest. In your portfolio, you want to invest in Stock A, Stock B, and a risk-free asset. You want to invest $30,000 in Stock A and the beta of Stock A is 0.80. The beta of Stock B is 30. A) What is the market beta? B) What is the beta of the risk-free asset? C)How much should you invest in Stock B...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT