Question

Intro

You want to invest in either a stock or Treasury bills (the risk-free asset). The stock has an expected return of 6% and a standard deviation of returns of 34%. T-bills have a return of 2%.

Attempt 1/1 for 10 pts.

Part 1

If you invest 70% in the stock and 30% in T-bills, what is your expected return for the complete portfolio?

Move on

Attempt 1/1 for 10 pts.

Part 2

**What is the standard deviation of returns for such a
portfolio?**

**3+ Decimals**

Answer #1

Calculations-

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Mary has $100 to invest in either a risky stock or a risk-free
treasury bill. The table below shows the expected return and risks
for each. Expected return for stock is 30% and risk is 40. Expected
return for treasury bills is 3% and the risk is 0.
a. Assume Mary’s overall portfolio risk is 30. i. What is her
expected return for her portfolio. ii. What proportion of her
overall money does she invest in stocks? b. What if...

You invest $100 in a portfolio of stock JET and a risk-free
asset with a return of 5%. JET has an expected return of 12% and a
standard deviation of 10%. What is the percentage of your portfolio
in the risk-free asset if your portfolio’s standard deviation is
9%?
A. 30%
B. 90%
C. 50%
D. 10%

You invest $100 in a portfolio of stock JET and a risk-free
asset with a return of 5%. JET has an expected return of 12% and a
standard deviation of 10%. What is the percentage of your portfolio
in the risk-free asset if your portfolio’s standard deviation is
9%? A. 30% B. 90% C. 50% D. 10%

you have $100,000 to invest in either stock D, Stock F, or a
risk-free asset. ou must invest all your money. Your goal is to
create a portfolio that has an expected return of 9.9 percent.
Assume D has an expected return of 12.8 percent, F has an expected
return of 9.3 percent, and the risk-free rate is 3.8 percent.
Required: If you invest $50,000 in Stock D, how much will you
invest in Stock F?

Intro
The price of Facebook stock is currently at $30 and you decide
to buy 200 shares on margin. You borrow $3,000 from your broker and
finance the remainder of the purchase with your own cash.
Attempt 1/1 for 10 pts.
Part 1
What is your initial percentage margin?
Move on
Attempt 1/1 for 10 pts.
Part 2
If the price rises to $35, what is the net
return?
3+ Decimals

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 can invest your money either in risk-free government bonds
that yield 3% per year, or you can buy a well- diversified index
fund that has an expected return of 10% and a standard deviation of
25%. Since the index fund resembles the market portfolio, assume
that the beta of this fund is 1.
a) Suppose you want to create a portfolio with an
expected return of 8% (by investing in government bonds and the
index fund). What would be...

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?

The risk and the return of an investor can be reduced by adding
a risk-free Treasury bill to the market portfolio. Assume that the
standard deviation of the market portfolio is 14%, its expected
return is 12% and that you can borrow or invest at the risk-free
Treasury bill rate of 3%. If you want to reduce an investor’s risk
to a target standard deviation of 5%, what percentage of
your portfolio would you invest in the market
portfolio?

Suppose you want to invest $ 1 million and you have two assets
to invest in: Risk free asset with return of 12% per year and a
risky asset with expected return of 30% and standard deviation of
40%. If you want a portfolio with standard deviation of 30% how
much do you invest in each of the assets?

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