Homework Answers
Portfolio return=Respective return*Respective weight
=(0.18*11)+(0.65*14)+(0.17*2)
which is equal to
=11.42%
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d) What is the expected rate of return on a portfolio 18% of which is invested...
You manage a risky portfolio with an expected rate of return of 18% and a standard...
You manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 28%. The T-bill rate is 8%. Your client's degree of risk aversion is A= 3.5, assuming a utility function U=EU - VAо. a. What proportion, y, of the total investment should be invested in your fund? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Investment proportion y b. What is the expected value and standard deviation of the...
You manage a risky portfolio with an expected rate of return of 18% and a standard...
You manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 29%. The T-bill rate is 8%. Your risky portfolio includes the following investments in the given proportions: Stock A 35 % Stock B 35 % Stock C 30 % Suppose that your client decides to invest in your portfolio a proportion y of the total investment budget so that the overall portfolio will have an expected rate of return of 14%. a....
Problem 6-18 You manage a risky portfolio with an expected rate of return of 17% and...
Problem 6-18 You manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 38%. The T-bill rate is 6%. Suppose that your client prefers to invest in your fund a proportion y that maximizes the expected return on the complete portfolio subject to the constraint that the complete portfolio's standard deviation will not exceed 17% a. What is the investment proportion. Y? (Round your answer to 2 decimal places.) Investment proportion y b....
You manage a risky portfolio with an expected rate of return of 18% and a standard...
You manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 29%. The T-bill rate is 5%. Suppose that your client prefers to invest in your fund a proportion y that maximizes the expected return on the complete portfolio subject to the constraint that the complete portfolio's standard deviation will not exceed 18%. a. What is the investment proportion, y? (Round your answer to 2 decimal places.) Investment proportion y b. What is...
You manage a risky portfolio with an expected rate of return of 18% and a standard...
You manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 31%. The T-bill rate is 4%. Suppose that your client prefers to invest in your fund a proportion y that maximizes the expected return on the complete portfolio subject to the constraint that the complete portfolio’s standard deviation will not exceed 18%. a. What is the investment proportion, y? (Round your answer to 2 decimal places.) b. What is the expected rate...
John's current portfolio of S500,000 is invested as follows: Expected annual Current Value Annual standard return...
John's current portfolio of S500,000 is invested as follows: Expected annual Current Value Annual standard return $100,000 Bonds 12% S250,000 HSBC shares 8% 12% S150,000 SaSa shares 10% 18% John soon expects to receive a gratuity of S200,000 and plans to invest the entire amount in an index fund that best complements the current portfolio. John is considering the following four index funds. His selection criteria are to maintain or increase the expected return of the current portfolio and maintain...
Assume that you manage a risky portfolio with an expected rate of return of 18% and...
Assume that you manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 34%. The T-bill rate is 4%. Your client chooses to invest 85% of a portfolio in your fund and 15% in a T-bill money market fund. a. What is the expected return and standard deviation of your client's portfolio? (Round your answers to 2 decimal places.) Expected return % per year Standard deviation % per year b. Suppose your risky...
a. Based on the current portfolio composition and the expected rates of return given above, what is the expected rate...
a. Based on the current portfolio composition and the expected
rates of return given above, what is the expected rate of return
for Barry's portfolio?
b. Barry is considering a reallocation of his investments to
include more Treasury bills and less exposure to emerging markets.
If Barry moves all of his money from the emerging market fund and
puts it in Treasury bills, what will be the expected rate of
return on the resulting portfolio?
(Portfolio expected rate of return)...
You manage a risky portfolio with an expected rate of return of 18% and a standard...
You manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 36%. The T-bill rate is 6%. Your risky portfolio includes the following investments in the given proportions: Stock A Stock B Stock C 279 358 388 Suppose that your client decides to invest in your portfolio a proportion y of the total investment budget so that the overall portfolio will have an expected rate of return of 15%. a. What is the...
5. Return and Risk of Portfolio (12%) Mr. Smith's portfolio of $2 million is invested as...
5. Return and Risk of Portfolio (12%) Mr. Smith's portfolio of $2 million is invested as follows: Summary of Smith's Current Portfolio Annual Percentage of Expected Value Standard Total Annual Return Deviation Short-term Bonds 200,000 10% 4.6% 1.6% Domestic Large-Cap 600,000 30% 12.4% 19.5% Equities Domestic Small Cap 1.200.000 60% 16.0% 29.9% Equities Total Portfolio 2,000,000 100% 13.8% 23.1% Smith soon expects to receive an additional $2 million and plans to invest the entire amount in an index fund that...
You manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 28%. The T-bill rate is 8%. Your client's degree of risk aversion is A= 3.5, assuming a utility function U=EU - VAо. a. What proportion, y, of the total investment should be invested in your fund? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Investment proportion y b. What is the expected value and standard deviation of the...
Problem 6-18 You manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 38%. The T-bill rate is 6%. Suppose that your client prefers to invest in your fund a proportion y that maximizes the expected return on the complete portfolio subject to the constraint that the complete portfolio's standard deviation will not exceed 17% a. What is the investment proportion. Y? (Round your answer to 2 decimal places.) Investment proportion y b....
You manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 29%. The T-bill rate is 5%. Suppose that your client prefers to invest in your fund a proportion y that maximizes the expected return on the complete portfolio subject to the constraint that the complete portfolio's standard deviation will not exceed 18%. a. What is the investment proportion, y? (Round your answer to 2 decimal places.) Investment proportion y b. What is...
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a. Based on the current portfolio composition and the expected
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for Barry's portfolio?
b. Barry is considering a reallocation of his investments to
include more Treasury bills and less exposure to emerging markets.
If Barry moves all of his money from the emerging market fund and
puts it in Treasury bills, what will be the expected rate of
return on the resulting portfolio?
(Portfolio expected rate of return)...
You manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 36%. The T-bill rate is 6%. Your risky portfolio includes the following investments in the given proportions: Stock A Stock B Stock C 279 358 388 Suppose that your client decides to invest in your portfolio a proportion y of the total investment budget so that the overall portfolio will have an expected rate of return of 15%. a. What is the...
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