The Bold part is the problem, and the non-Bold part is the solution.
Why is the solution like that? Please explain this solution!
Homework Answers
The solution is incorrect
It should be:
beta=correlation with market*standard deviation of stock/standard deviation of market=0.2*80%/25%=0.64000
required return=risk free rate+beta*(market return-risk free rate)=4%+0.64000*(12%-4%)=9.12%
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The Bold part is the problem, and the non-Bold part is the
solution.
Why is the...
how to solve this question? I want to know whether my solution is correct. <My solution>...
how to solve this question? I want to know whether my
solution is correct.
<My solution>
the 9.12% is the required return for venture capital
fund in the current portfolio of Tanglewood,
and the expected return of venture capital fund is
20%, so
20% > 9.12% makes it conclude that we should add
more venture capital funds in the portfolio.
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please help with step no excel :) 5) You have invested only in the BlueChip Fund,...
please help with step no excel :)
5) You have invested only in the BlueChip Fund, a mutual fund that invests mainly in stocks. At the moment, the Blue Chip Fund has a volatility of 32%. Your broker suggests that you add the GoldAll Fund to your current portfolio. The GoldAll Fund has a volatility of 35% and a correlation of -0.10 with the BlueChip Fund. Risk-free interest rate is equal to 5%. The required return on the GoldAll Fund...
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Thank you so much You currently have $150,000 invested in a portfolio that has an expected...
Thank you so much
You currently have $150,000 invested in a portfolio that has an expected return of 11% and a volatility of 9%. Suppose the risk-free rate is 4%, and there is another portfolio has an expected return of 16% and a volatility of 12%. a. What portfolio has a higher expected return than your portfolio but with the same volatility? b. What portfolio has a lower volatility than your portfolio but with the same expected return? a. What...
how to solve this question? I want to know whether my
solution is correct.
<My solution>
the 9.12% is the required return for venture capital
fund in the current portfolio of Tanglewood,
and the expected return of venture capital fund is
20%, so
20% > 9.12% makes it conclude that we should add
more venture capital funds in the portfolio.
11-38. In addition to risk-free securities, you are currently invested in the Tanglewood Fund, a broad- based fund of stocks...
In addition to risk-free securities, you are currently invested in the Tanglewood Fund, a broad-based fund of stocks and other securities with an expected return of 12% and a volatility of 26%. Currently, the risk-free rate of interest is 5%. Your broker suggests that you add a venture capital fund to your current portfolio. The venture capital fund has an expected return of 21%, a volatility of 79%, and a correlation of 0.2 with the Tanglewood Fund. Assume you follow...
In addition to nsk-free securities, you are currently invested in the Tanglewood Fund, a broad-based fund o stocks and other securities than expected return o 12% and a volatility of 25%. Currently, the nsk-free rate terest is 4%. Your broker suggests that you add a venture capital und to your current portfolio. The venture capital fund has an expected return of 20%, a volatility of 80%, and a correlation of 0.2 with the Tanglewood Fund. Assume you follow your broker's...
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You are presently invested in the Luther Fund, a broad based mutual fund that invests in 7. (10 pts.) stocks and other securities. The Luther Fund has an expected return of 14% and a volatility of 20%. Risk-free Treasury bills are currently offering returns of 4%. You are considering adding a precious metals fund to your current portfolio. The metals fund has an expected return of 10%, a volatility of 30%, and a correlation of-20 with the Luther Fund. Will...
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please help with step no excel :)
5) You have invested only in the BlueChip Fund, a mutual fund that invests mainly in stocks. At the moment, the Blue Chip Fund has a volatility of 32%. Your broker suggests that you add the GoldAll Fund to your current portfolio. The GoldAll Fund has a volatility of 35% and a correlation of -0.10 with the BlueChip Fund. Risk-free interest rate is equal to 5%. The required return on the GoldAll Fund...
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Thank you so much
You currently have $150,000 invested in a portfolio that has an expected return of 11% and a volatility of 9%. Suppose the risk-free rate is 4%, and there is another portfolio has an expected return of 16% and a volatility of 12%. a. What portfolio has a higher expected return than your portfolio but with the same volatility? b. What portfolio has a lower volatility than your portfolio but with the same expected return? a. What...
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