Calculation of Weight of stocks
Assuming the weight of Bond fund as w, weight of the stock fund is given in the question as 60.83%:
(60.83% x 10%) + (w x 5%) + (1-w) x 4.9% = 8%
6.083 + 5w + 0.049 - 4.9w = 8
5w - 4.9w = 8 - 6.083 - 0.049
0.1w = 1.868
w = 1.868 / 0.1 = 18.68%
Hence the proportion of investments is as follows:
Portfolio | Proportion |
Expected Return |
Standard Deviation |
Stock Fund | 60.83% | 10% | 39% |
Bond Fund | 18.68% | 5% | 33% |
T-Bill | 20.49% | 4.90% | 0% |
Total | 100.00% |
Variance of portfolio = [(0.6083)2 x (0.39)2] + [(0.1868)2 x (0.33)2] + [2 x (0.6083) x (0.39) x (0.1868) x (0.33) x (0.0030)]
= 0.060169
Standard Deviation = (0.060169)1/2 = 24.53%
A pension fund manager is considering three mutual funds. The first is a stock fund, the...
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 4.9%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) Bond fund (B) 39% 10% 5% 33% The correlation between the fund returns is .0030. Suppose now that your portfolio must yield an expected...
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 4.1%. The probability distributions of the risky funds are: Expected Return 11% Stock fund (S) Bond fund (B) Standard Deviation 33% 25% 8% The correlation between the fund returns is 1560. Suppose now that your portfolio must yield an expected...
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 4.8%. The probability distributions of the risky funds are: Expected Return 18% Standard Deviation Stock fund (S) Bond fund (B) 38% 98 32% The correlation between the fund returns is .1313. Suppose now that your portfolio must yield an expected...
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.9%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 20 % 49 % Bond fund (B) 9 % 43 % The correlation between the fund returns is .0721. Suppose now that your portfolio...
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.9%. The probability distributions of the risky funds are: Stock fund (S) Bond fund (B) Expected Return 20% 9% Standard Deviation 49% 43% The correlation between the fund returns is .0721. Suppose now that your portfolio must yield an expected...
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 4.8%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 18 % 38 % Bond fund (B) 9 % 32 % The correlation between the fund returns is .1313. Suppose now that your portfolio...
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.3%. The probability distributions of the risky funds are Expected Return Standard Deviation Stock fund (S) Bond fund (8) 14% 43% 7% 37% The correlation between the fund returns is 0459 Suppose now that your portfolio must yield an expected...
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 3.0%. The probability distributions of the risky funds are Expected Return 12% Stock fund (S) Bond fund (B) Standard Deviation 41% 30% 5% The correlation between the fund returns is .0667. Suppose now that your portfolio must yield an expected...
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-teerm government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.8 %. The probability distributions of the risky funds are: standard Deviation Expected Return 191 98 Stock fund (8) Bond fund (B) 488 42 The correlation between the fund returns is .0762. Suppose now that your portfolio must yleld an...
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 4.5%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 15 % 35 % Bond fund (B) 6 % 29 % The correlation between the fund returns is .0517. Suppose now that your portfolio...