Question

Intro You want to invest in either a stock or Treasury bills (the risk-free asset). The...

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

Homework Answers

Answer #1

Calculations-

Please upvote if the ans is helpful.In case of doubt,do comment.Thanks.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Mary has $100 to invest in either a risky stock or a risk-free treasury bill. The...
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...
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...
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...
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...
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...
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 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...
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...
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?
You invest $1,700 in a complete portfolio. The complete portfolio is composed of a risky asset...
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%.