Calculate the expected return andstandard deviation of a portfolio invested in the following two risky assets.

1. There are 2 assets you can invest in: a risky portfolio with an expected return...

1. There are 2 assets you can invest in: a risky portfolio with an expected return of 6% and volatility of 15%, and a government t-bill (always used as the 'risk-free' asset) with a guaranteed return of 1%. Your risk-aversion coefficient A = 4, and the utility you get from your investment portfolio can be described in the standard way as U = E(r) - 1/2 * A * variance. Assume that you can borrow money at the risk-free rate....

Use the following information to calculate the expected return and standard deviation of a portfolio that...

Use the following information to calculate the expected return and standard deviation of a portfolio that is 60 percent invested in 3 Doors, Inc., and 40 percent invested in Down Co.: (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) 3 Doors, Inc. Down Co. Expected return, E(R) 11 % 10 % Standard deviation, σ 31 33 Correlation .16

In a universe with four risky assets the market portfolio is comprised of an equally weighted...

In a universe with four risky assets the market portfolio is comprised of an equally weighted combination of those assets. This market portfolio has an expected return of 8% and a variance of 12%. Assume, that in addition a risk-free asset with return of 1% exists. What percentage of each risky asset will an investor with Utility function U(r) = E(r) – 0.4 var(r) hold in his portfolio? 18% 20% 27% 30%

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 on the risky portfolio is 15%. The risk-free rate is 5%. The standard...

The expected return on the risky portfolio is 15%. The risk-free rate is 5%. The standard deviation of return on the risky portfolio is 22%. Tina constructed a complete portfolio from this risky portfolio and the risk-free asset. If her portfolio has an expected return of 12%, what is the standard deviation of her complete portfolio?

(i) The expected returns on two distinct risky assets A and B are correlated and a...

(i) The expected returns on two distinct risky assets A and B are correlated and a portfolio consisting of A and B has zero variance of expected return. What can be said about the correlation between the expected returns of risky assets A and B? (ii) An investor constructs an efficient portfolio that invests 150% of his investment in the tangent portfolio of risky asset and is short in the risky free asset for the rest. What can be said...

Drew can design a risky portfolio based on two risky assets, Origami and Gamiori. Origami has...

Drew can design a risky portfolio based on two risky assets, Origami and Gamiori. Origami has an expected return of 13% and a standard deviation of 20%. Gamiori has an expected return of 6% and a standard deviation of 10%. The correlation coefficient between the returns of Origami and Gamiori is 0.30. The risk-free rate of return is 4%. What is the portfolio weight of Origami in the optimal risky portfolio?

Use the following information to calculate the expected return and standard deviation of a portfolio that...

Use the following information to calculate the expected return and standard deviation of a portfolio that is 50 percent invested in 3 Doors, Inc., and 50 percent invested in Down Co.: (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) 3 Doors, Inc. Down Co. Expected return, E(R) 19 % 14 % Standard deviation, σ 49 51 Correlation .34

Use the following information to calculate the expected return and standard deviation of a portfolio that...

Use the following information to calculate the expected return and standard deviation of a portfolio that is 50 percent invested in 3 Doors, Inc., and 50 percent invested in Down Co.: (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) 3 Doors, Inc. Down Co.   Expected return, E(R) 14 % 12 %   Standard deviation, σ 44 46   Correlation .29         Expected return %   Standard deviation...

Asset Expected Return Standard Deviation Risky debt 6% 0.25 Equity 10% .60 Riskless debt 4.5% 0...

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 2A. Using the Markowitz portfolio optimization method, what would the composition of the optimal risky portfolio of these assets be? Please show work