Question

BUS 3053 -51 (1) Homework: Chapter Eight Score: 0 of 2 pts 5 of 10 (0 complete) P8-6 (similar to) HW Score: 0%, 0 Question Help (Portfolio expected rate of return) Barry Swifter is 60 years of age and considering retirement. Barry's retirement portfolio currently is valued at $750,000 and is allocated in Treasury bills, an S&P 500 index fund, and an emerging market fund as follows: . 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? a. Based on the current portfolio composition and the given expected rates of return, the expected rate of return for Barry's portfolio is %. (Round to two decimal places.)

Answer 1

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ke - Microsoft Excel (Product Activation Failed) Add-Ins File Home Insert Page Layout Formulas Data Review View - 2x % Cut Calibri Dr General -11AA = = = D- DA Wrap Text Merge & Center - BI U $ % , :.: Insert Delete Format Conditional Format Formatting as Table Styles Cell Styles E Copy Paste Format Painter Clipboard AG503 v Σ AutoSum : A Fill Sort & Clear Filter Editing Find & Select Font Alignment Number Cells > Z AA AB AC AD E AF AG AH 7 493 BARRY INVESTMENT IN 494 495 496 497 EXPECTED RETURN VALUE OF INVESTMENT WEIGHTS OF INVESTMENT EXPECTED RETURN A*C 0.43% 4.53% 4.69% 498 499 T BILLS S&P 500 INDEX FUND EMERGING MARKET FUND 4.30% 8.50% 12.80% 75000 400000 275000 750000 EXPECTED RETURN ON PORTFOLIO 10.00% 53.33% 36.67% 500 501 502 ANS 1 9.66% 503 INVESTMENT IN EXPECTED RETURN VALUE OF INVESTMENT WEIGHTS OF INVESTMENT 504 505 506 507 508 509 EXPECTED RETURN - A*C 2.01% 4.53% T BILLS S&P 500 INDEX FUND 4.30% 8.50% 350000 400000 46.67% 53.33% 510 511 750000 EXPECTED RETURN ON PORTFOLIO ANS 2 6.54% 512 513 K M Convexity DGM betaport future INDEX INTL CAP BUD SANDRINE LEASING PV, FV, ANNUITY DIR right clean KE CAPM UTILITY, SHARPE, beta ferences: AG470 Rea YIELD bond portfolio WACC RO BO! 120% - -_+ 9 * OENG 09-12-2019 D R