Given an optimal risky portfolio with an expected return of 0.09, standard deviation of 0.17, and a risk-free rate of 0.03, what is the slope of the best feasible capital allocation line (CAL)?
The slope of the best feasible capital allocation line (CAL) is the Sharpe Ratio.
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Given an optimal risky portfolio with an expected return of 0.09, standard deviation of 0.17, and...
Given an optimal risky portfolio with expected return of 12% and standard deviation of 26% and a risk free rate of 3%, what is the slope of the best feasible CAL? Group of answer choices 0.64 0.14 0.08 0.35 0.36
You manage a risky portfolio with an expected return of 12% and a standard deviation of 24%. Assume that you can invest and borrow at a risk-free rate of 3%, using T-bills. a. Draw the Capital Allocation Line (CAL) for this combination of risky portfolio and risk-free asset. What is the Sharpe ratio of the risky portfolio? b. Your client chooses to invest 50% of their funds into your risky portfolio and 50% risk-free. What is the expected return and...
Suppose the optimal risky portfolio has an expected return of 13.25% and a standard deviation of 24.57%. Mr. Jones wants an efficient portfolio with an expected return of 12%. If the optimal risky portfolio consists of 70.75% in stocks and 29.25% in bonds, what is the proportion of Mr. Jones' portfolio invested in the stock fund. the risk-free rate is 5.5%.
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...
A risky portfolio has an expected return of 12% and standard deviation of 25%. Given a risk free rate of 3%, what percentage of a clients portfolio should be allocated to the risky portfolio if the client has a risk aversion of 4?
Q2: A: Suppose that you manage a risky portfolio with an expected rate of return of 12% and a standard deviation of 25%. The T-bill rate is 3%. Your client chooses to invest 60% of a portfolio in your fund and 40% in the T-bills. What is the slope of the Capial Allocation Line (CAL)? 0.36 B: Suppose the same client in the previous problem decides to invest in your risky portfolio a proportion (y) of his total investment budget...
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...
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...
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%
Question 1 Consider two risky assets A and B with E(rA)= 15%, Sigma_A= 32%, E(rB)= 0.09, Sigma_B= 23%, corrA,B= 0.2. The risk free rate is 5%. The optimal risky portfolio of comprised of the two risky assets is to allocate 64% to A and the rest to B. What is the standard deviation of the optimal risky portfolio ? Select one: a. 20.75% b. 23.61% c. 22.86% d. 23.00% Question 2 Continued with previous question. What is the Sharpe ratio...