Homework Answers
Standard deviation of Portfolio-O = 0.185
Standard deviation of Portfolio-D = 0.140
Weight of Portfolio-O in Portfolio-D = y
We can find value y with following equation:
Weight of Stock B in Portfolio-O = 1-0.32 = 0.68
Thus, Weight of Stock B in Portfolio D:
Hope it will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.
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Question 31 6.5 p Given the following information, please address the following question. Expected Sharpe return...
Show workings and answer to 3 decimal places thank you! To the person who answered this...
Show workings and answer to 3 decimal places thank you!
To the person who answered this question before. Dont :)
Given the following information, please address the following questions. Expected Sharpe return Std. Dev ratio Stock A 0.230 0.350 0.514 Stock B 0.120 0.250 0.280 Risk-free Rate 0.050 Optimal Portfolio O (Comprised of comprised of 57% investment in Stock A and the remaining in Stock 0.227 0.586 Correlation Between Stock A and B = If you want to use risky...
Question 4 Below is the risk and return characteristics of two risky assets 10 points Stock...
Question 4 Below is the risk and return characteristics of two risky assets 10 points Stock A Stock B E(R) 4.00%) Std. dev 27.00% 57.00% 11.00% Correlation (A,B):-1 a. Is it possible to construct a portfolio from the two stocks so that the portfolio is risk-free (i.e., the portfolio standard deviation is 0)? Please explain. Yes/No yes You're so smart! b. If so, what is the expected return on this risk-free portfolio? expected return
3. You have a risky portfolio that yields an expected rate of return of 15% with...
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 risk aversion is 5, how much should you invest in the risky portfolio? 4. A pension fund manager is considering three mutual funds. The first is a stock fund, the...
Already uploaded this question and the answer was wrong. Please only answer if you know you...
Already uploaded this question and the answer was wrong. Please
only answer if you know you are correct. Thank you!
The following data applies to Questions 4 to 9. A pension fund manager is considering three investment options. The first is a stock fund, the second is a corporate bond fund, and the third is a T-bill money market fund (the risk-free asset) that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected return...
The following questions are in order: Question 1 1 pts The following data applies to Questions...
The following questions are in order:
Question 1 1 pts The following data applies to Questions 1 to 3 Consider two risky assets: a stock fund and a bond fund with the following probability distributions. Scenario Severe recession Mild recession Normal growth Boom What is the expected return for the bond fund? Your answer should be in percentage points and accurate to the hundredth. For example, if your answer is 10.2511%, then type in 10.25 Probability 0.05 0.25 0.40 0.30...
29) Which of the following statements is FALSE? A) The Sharpe ratio of the portfolio tells us how much our expected...
29) Which of the following statements is FALSE? A) The Sharpe ratio of the portfolio tells us how much our expected retun will increase for a given increase in volatility B) We should continue to trade securities until the expected r return of each security equals its required return. Q) The required return is the expected return that is necessary to compensate for the risk that an investment will contribute to the portfolio. D) If security is required retun exceeds...
answer all. For the next question, assume an investor with the following utility function U-E)-3/2) 12. To maximize her expected uility, she would choose the set with an espect rate of return of...
answer all.
For the next question, assume an investor with the following utility function U-E)-3/2) 12. To maximize her expected uility, she would choose the set with an espect rate of return of and a standard deviation ofrspectively A. 1296; 20% B. 10%; 15% C. 1056; 1056 D, 8%, 10% Е.none ofthe above 13. Which of the following statements regarding the Capital Allocation Line (CAL) false? A. The CAL shows risk-return combinations. B. The slope of the CAL equals the...
PLEASE ANSWER 1-4b. AND EXPLAIN ANSWERS. THIS IS SECOND TIME I ASKED QUESTION PLEASE ONLY ANSWER...
PLEASE ANSWER 1-4b. AND EXPLAIN ANSWERS.
THIS IS SECOND TIME I ASKED QUESTION PLEASE ONLY ANSWER IF YOU ARE
SURE YOU ARE CORRECT.
EXHIBITS BELOW:
Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 22% each of the last three years. Casey is considering a capital budgeting project that would require a $3,800,000 investment in equipment with a useful life of five...
Show workings and answer to 3 decimal places thank you!
To the person who answered this question before. Dont :)
Given the following information, please address the following questions. Expected Sharpe return Std. Dev ratio Stock A 0.230 0.350 0.514 Stock B 0.120 0.250 0.280 Risk-free Rate 0.050 Optimal Portfolio O (Comprised of comprised of 57% investment in Stock A and the remaining in Stock 0.227 0.586 Correlation Between Stock A and B = If you want to use risky...
Question 4 Below is the risk and return characteristics of two risky assets 10 points Stock A Stock B E(R) 4.00%) Std. dev 27.00% 57.00% 11.00% Correlation (A,B):-1 a. Is it possible to construct a portfolio from the two stocks so that the portfolio is risk-free (i.e., the portfolio standard deviation is 0)? Please explain. Yes/No yes You're so smart! b. If so, what is the expected return on this risk-free portfolio? expected return
Already uploaded this question and the answer was wrong. Please
only answer if you know you are correct. Thank you!
The following data applies to Questions 4 to 9. A pension fund manager is considering three investment options. The first is a stock fund, the second is a corporate bond fund, and the third is a T-bill money market fund (the risk-free asset) that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected return...
The following questions are in order:
Question 1 1 pts The following data applies to Questions 1 to 3 Consider two risky assets: a stock fund and a bond fund with the following probability distributions. Scenario Severe recession Mild recession Normal growth Boom What is the expected return for the bond fund? Your answer should be in percentage points and accurate to the hundredth. For example, if your answer is 10.2511%, then type in 10.25 Probability 0.05 0.25 0.40 0.30...
29) Which of the following statements is FALSE? A) The Sharpe ratio of the portfolio tells us how much our expected retun will increase for a given increase in volatility B) We should continue to trade securities until the expected r return of each security equals its required return. Q) The required return is the expected return that is necessary to compensate for the risk that an investment will contribute to the portfolio. D) If security is required retun exceeds...
answer all.
For the next question, assume an investor with the following utility function U-E)-3/2) 12. To maximize her expected uility, she would choose the set with an espect rate of return of and a standard deviation ofrspectively A. 1296; 20% B. 10%; 15% C. 1056; 1056 D, 8%, 10% Е.none ofthe above 13. Which of the following statements regarding the Capital Allocation Line (CAL) false? A. The CAL shows risk-return combinations. B. The slope of the CAL equals the...
PLEASE ANSWER 1-4b. AND EXPLAIN ANSWERS.
THIS IS SECOND TIME I ASKED QUESTION PLEASE ONLY ANSWER IF YOU ARE
SURE YOU ARE CORRECT.
EXHIBITS BELOW:
Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 22% each of the last three years. Casey is considering a capital budgeting project that would require a $3,800,000 investment in equipment with a useful life of five...
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