Question

What is the Utility for an asset with expected return of 21% and standard deviation of...

What is the Utility for an asset with expected return of 21% and standard deviation of 41% for an investor with risk aversion 1.8?

Provide your answer in decimals, rounding to four digits.

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

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
You have the following assets available to you to invest in: Asset Expected Return Standard Deviation...
You have the following assets available to you to invest in: Asset Expected Return Standard Deviation Risky debt 6% 0.25 Equity 10% .60 Riskless debt 4.5% 0 The coefficient of correlation between the returns on the risky debt and equity is 0.72 2D. Hector has a coefficient of risk aversion of 1.8. What percentage of his assets should he invest in the risky portfolio? 2E. What would the expected return be on Hector’s portfolio? 2F. What would the standard deviation...
the expected return and standard deviation of S is 14% and 29%, respectively. the expected return...
the expected return and standard deviation of S is 14% and 29%, respectively. the expected return and standard deviation of B is 6% and 15%, respectively. correlation between S and B is -0.1 T-bill rate is 1% and The client’s risk aversion (A) is 8 1- What is the expected return and standard deviation of the optimal risky portfolio?  2-Find the proportion of the optimal risky portfolio (= y) in your client’s complete portfolio. 3-What is the expected return and standard...
The expected return of stock A is 21% per year and the stock's annual standard deviation...
The expected return of stock A is 21% per year and the stock's annual standard deviation is 46%. There is also a risk-free asset. When a complete portfolio is formed with a portfolio weight on the risky asset of 36%, the expected return on the complete portfolio is 8.0%. 1. Compute the risk-free rate of return. 2. Compute the annual standard deviation of the complete portfolio above. 3. Compute the market price of risk using the Sharpe ratio?
Suppose Asset A has an expected return of 10% and a standard deviation of 20%. Asset...
Suppose Asset A has an expected return of 10% and a standard deviation of 20%. Asset B has an expected return of 16% and a standard deviation of 40%. If the correlation between A and B is 0.35, what are the expected return and standard deviation for a portfolio consisting of 30% Asset A and 70% Asset B? Plot the attainable portfolios for a correlation of 0.35. Now plot the attainable portfolios for correlations of +1.0 and −1.0. Suppose a...
Consider a portfolio that consist of 2 assets A and B; Asset Expected Return Standard Deviation...
Consider a portfolio that consist of 2 assets A and B; Asset Expected Return Standard Deviation Correlation A 20% 10% B 40% 20% A&B -1 Compute the asset weights (WA and WB) so that an investor obtains a zero risk portfolio. Show all your workings and calculations.
Asset K has an expected return of 11 percent and a standard deviation of 26 percent....
Asset K has an expected return of 11 percent and a standard deviation of 26 percent. Asset L has an expected return of 9 percent and a standard deviation of 21 percent. The correlation between the assets is 0.21. What are the expected return and standard deviation of the minimum variance portfolio? Expected return% Standard deviation%
An investor has a quadratic utility function where U = E(R) – ½ A σ2. This...
An investor has a quadratic utility function where U = E(R) – ½ A σ2. This investor has a coefficient of risk aversion of 2.0. There are two risky assets and a risk-free asset available to this investor. Asset A has an expected return of 7% and a standard deviation of 16%. Asset B has an expected return of 14% and a standard deviation of 26%. Assets A and B have a correlation of 0.3. Rf is a risk-free investment...
There are 2 assets. Asset 1: Expected return 7.5%, standard deviation 9% Asset 2: Expected return...
There are 2 assets. Asset 1: Expected return 7.5%, standard deviation 9% Asset 2: Expected return 11%, standard deviation 12%. You are not sure about the correlation between 2 assets. You hold 30% of your portfolio in asset 1 and 70% in asset 2. What is the highest possible variance of your portfolio? Hint 1: Think how the portfolio variance depends on the correlation between 2 assets. Hint 2: Think which values the correlation between Asset 1 and Asset 2...
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...
The domestic asset has an expected return of 9% and standard deviation of 25% The foreign...
The domestic asset has an expected return of 9% and standard deviation of 25% The foreign asset has an expected return of 15% and standard deviation of 35% The correlation between two asset is 0.40. Assuming the portfolio has 30% invested in the domestic asset and the reminder in the foreign asset.   1. calculate the portfolio's expected return and standard deviation. SHOW YOUR WORK rp=................% op=................%
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT