Question

. You have $50,000 to invest and are considering a portfolio which includes one risk-free asset...

. You have $50,000 to invest and are considering a portfolio which includes one risk-free asset and two risky assets (X and Y). The risk-free return is 5% and the returns for X and Y are 25% and 12% respectively. The optimal risky asset combination is 70% X and 30% Y. If you want a target return of 18% from this portfolio, how much money should you invest in asset Y? (Points : 5)

12,111.80

28,260.87

9,627.32

16.517.92

31,271.08

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
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%...
Risky Asset A and Risky Asset B are combined so that the new portfolio consists of...
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...
You are considering investing $1,200 in a complete portfolio. The complete portfolio is composed of Treasury...
You are considering investing $1,200 in a complete portfolio. The complete portfolio is composed of Treasury bills that pay 5% and a risky portfolio, P, constructed with two risky securities, X and Y. The optimal weights of X and Y in P are 70% and 30% respectively. X has an expected rate of return of 13%, and Y has an expected rate of return of 12%. To form a complete portfolio with an expected rate of return of 8%, you...
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...
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 invest $10,000 in portfolio XYZ. The portfolio XYZ is composed of a risky asset with...
You invest $10,000 in portfolio XYZ. The portfolio XYZ is composed of a risky asset with an expected rate of return of 15% and a standard deviation of 20% over the one year time period. The risk free asset has a rate of return of 5% over the same time period. How much money should be invested in the risky asset so that the standard deviation of returns on XYZ portfolio is 10% over the one year time horizon
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...
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?
(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 are considering investing $1,300 in a complete portfolio. The complete portfolio is composed of Treasury...
You are considering investing $1,300 in a complete portfolio. The complete portfolio is composed of Treasury bills that pay 5% and a risky portfolio, P, constructed with two risky securities, X and Y. The optimal weights of X and Y in P are 65% and 35% respectively. X has an expected rate of return of 17%, and Y has an expected rate of return of 12%. To form a complete portfolio with an expected rate of return of 8%, you...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT