An investor invests 40% of her wealth in a risky asset with an expected rate of...
An investor invests 40% of her wealth in a risky asset with an expected rate of return of 15% and a standard deviation of 20%. The rest of her wealth is invested in the risk-free asset, which yields 6%. What are the expected return and standard deviation of her portfolio?
Homework Answers
We see that
Expected returns=40%*15%+(1-40%)*6%=9.600%
Standard deviation=40%*20%=8.00%
Add Answer to:
An investor invests 40% of her wealth in a risky asset with an
expected rate of...
12. An investor invests 40% of his wealth in a risky asset with an expected rate...
12. An investor invests 40% of his wealth in a risky asset with an expected rate of return of 15% and a variance of 0.04 and 60% in a treasury bill that pays 6%. Her portfolio's expected rate of return is and her portfolio return's standard deviation is 1) 8.0%, 12% 2) 9.6%, 8% 3) 11.4%, 10% 4) 13%, 12% moto of 4% One year
An investor invests 40 percent of his wealth in a risky asset with an expected rate...
An investor invests 40 percent of his wealth in a risky asset with an expected rate of return of 0.15 and a variance of 0.04 and 60 percent in a T-bill that pays 6 percent. His portfolio's expected return and standard deviation are __________ and __________, respectively. A. 0.096; 0.12 B. 0.295; 0.12 C. 0.795; 0.14 D. 0.114; 0.12 E. 0.096; 0.08
you invest in a risky asset with an expected rate of return of 0.17 and a standard deviation of 0.,40 and a T-bill with...
you invest in a risky asset with an expected rate of return of 0.17 and a standard deviation of 0.,40 and a T-bill with a rate of return of 0.04. what percentages of your money must be invested in the risky asset and the risk-free asset, respectively, to form a portfolio with an expected return of 0.11? a. 53.8% and 46.2% b.75% and 25% c.62.5% and 37.5% d.46.2% and 53.8%
You invest $100 in a risky asset with an expected rate of return of 0.11 and...
You invest $100 in a risky asset with an expected rate of return of 0.11 and a standard deviation of 0.21 and a T-bill with a rate of return of 0.045. What percentages of your money must be invested in the risk-free asset and the risky asset, respectively, to form a portfolio with a standard deviation of 0.08?
Suppose that you have a risky asset that provides you with an expected return of 12%...
Suppose that you have a risky asset that provides you with an expected return of 12% per year with 20% volatility (standard deviation). Consider a risk-free asset that provides you with a 3% risk-free return. a. If you have $100,000 and invest 80% into the risky asset and 20% into the 6. b. How much will your portfolio be worth if the realized return on the risky c. If you cannot borrow money, what is the maximum possible expected return...
You invest $100 in a risky asset with an expected rate of return of 0.12 and...
You invest $100 in a risky asset with an expected rate of return of 0.12 and a standard deviation of 0.15 and a T-bill with a rate of return of 0.05. A portfolio that has an expected outcome of $115 is formed by Investing $100 in the risky asset. Investing $80 in the risky asset and $20 in the risk-free asset. Borrowing $43 at the risk-free rate and investing the total amount ($143) in the risky asset. Investing $43 in...
You invest $100 in a risky asset with an expected rate of return of 0.11 and...
You invest $100 in a risky asset with an expected rate of return of 0.11 and a standard deviation of 0.21 and a T-bill with a rate of return of 0.045. What percentages of your money must be invested in the risky asset and the risk-free asset, respectively, to form a portfolio with an expected return of 0.13? Group of answer choices a)57.75% and 42.25% b)Cannot be determined. c)67.67% and 33.33% D)130.77% and –30.77% e)–30.77% and 130.77%
3) Assume that you manage a risky portfolio with an expected rate of return of 14%...
3) Assume that you manage a risky portfolio with an expected rate of return of 14% and standard deviation of 19%. The risk-free rate rate on a Treasury-bill is 6%. a. Your client chooses to invest 60% of a portfolio in your fund and 40% in a risk-free T-bill money market fund. What is the expected return and standard deviation of your client's portfolio? b. Suppose another investor decides to invest in your risky portfolio a proportion (w) of his...
2. (Understanding optimal portfolio choice) Consider two risky assets, the expected return of asset one is...
2. (Understanding optimal portfolio choice) Consider two risky assets, the expected return of asset one is μ-0.1, the expected return of asset two is μ2-0.15, the risk or standard deviation of asset one is σ1-0.1, the risk or standard deviation of asset two is σ2-02. The two assets also happen to have zero correlation. An investor plans to build a portfolio by investing w of his investment to asset one and the rest of his investment to asset two. Calculate...
For the following questions, assume that you manage a risky portfolio with an expected rate of...
For the following questions, assume that you manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 26%. The T-bill rate is 7%. 3. You have a risky portfolio that yields an expected rate of return of 15% with a standard deviation of 25%. Draw the CAL for an expected return/standard deviation diagram if the risk free rate is 5%. a. What is the slope of the CAL? b. If your coefficient of...
12. An investor invests 40% of his wealth in a risky asset with an expected rate of return of 15% and a variance of 0.04 and 60% in a treasury bill that pays 6%. Her portfolio's expected rate of return is and her portfolio return's standard deviation is 1) 8.0%, 12% 2) 9.6%, 8% 3) 11.4%, 10% 4) 13%, 12% moto of 4% One year
Suppose that you have a risky asset that provides you with an expected return of 12% per year with 20% volatility (standard deviation). Consider a risk-free asset that provides you with a 3% risk-free return. a. If you have $100,000 and invest 80% into the risky asset and 20% into the 6. b. How much will your portfolio be worth if the realized return on the risky c. If you cannot borrow money, what is the maximum possible expected return...
3) Assume that you manage a risky portfolio with an expected rate of return of 14% and standard deviation of 19%. The risk-free rate rate on a Treasury-bill is 6%. a. Your client chooses to invest 60% of a portfolio in your fund and 40% in a risk-free T-bill money market fund. What is the expected return and standard deviation of your client's portfolio? b. Suppose another investor decides to invest in your risky portfolio a proportion (w) of his...
2. (Understanding optimal portfolio choice) Consider two risky assets, the expected return of asset one is μ-0.1, the expected return of asset two is μ2-0.15, the risk or standard deviation of asset one is σ1-0.1, the risk or standard deviation of asset two is σ2-02. The two assets also happen to have zero correlation. An investor plans to build a portfolio by investing w of his investment to asset one and the rest of his investment to asset two. Calculate...
For the following questions, assume that you manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 26%. The T-bill rate is 7%. 3. You have a risky portfolio that yields an expected rate of return of 15% with a standard deviation of 25%. Draw the CAL for an expected return/standard deviation diagram if the risk free rate is 5%. a. What is the slope of the CAL? b. If your coefficient of...
Most questions answered within 3 hours.
-
The population standard deviation for the height of college
basketball players is 3.4 inches. If we...
asked 1 minute ago -
6.) Use valence bond theory to describe the number and types of
hybrid bonding orbitals on...
asked 3 minutes ago -
2. Define/explain the following traits that are important
adaptations for different types of vertebrate animals:
Jaws...
asked 4 minutes ago -
Firm K produced 45,000 radios using 9,000 hours of labor in
2003; total labor costs were...
asked 4 minutes ago -
Use the information in the table to answer the
question.
Year
2015
2016
2017
2018
Nominal...
asked 9 minutes ago -
Kelso Corporation just paid a dividend of D_0 = $1.50 per
share, and that dividend is...
asked 10 minutes ago -
Your ANOVA was statistically significant (Reject the
H0). The groups had a means of:
Group A:...
asked 17 minutes ago -
In cases of negative frequency-dependent selection, _______
phenotype typically has _______ fitness
A
the least common...
asked 19 minutes ago -
Class: Criminal Law
Question: Explain the difference between
aggravating and mitigating factors.
asked 24 minutes ago -
#I want you please to explain why the answer for Q10 is ( C )
?...
asked 24 minutes ago -
An island economy consumes only jellybeans, running shoes,
Pepsi, and Vanilla ice compact discs. The base...
asked 28 minutes ago -
On September 1, Ziegler Corporation had 50,000 shares of $5 par
value common stock, and $1,500,000...
asked 29 minutes ago