c.Borrowing $6700 ath the risk free rate and investing 16700 in the risky asset
(A) Cost of borrowing at risk free rate = $6700 x 5% = $335
(B) Returns on investing inthe risky asset = $16700 x 11% = $1837
Net returns = (B)- (A) = $1502
Your client invests in $10,000 in aT-bill with rate of return of 5% and a risky...
You invest $100 in a risky asset with an expected rate of return of 0.12 and a standard deviation of 0.15 and a T-bill with a rate of return of 0.05. A portfolio that has an expected outcome of $115 is formed by Investing $100 in the risky asset. Investing $80 in the risky asset and $20 in the risk-free asset. Borrowing $43 at the risk-free rate and investing the total amount ($143) in the risky asset. Investing $43 in...
An investor invests 40% of her wealth in a risky asset with an expected rate of return of 15% and a standard deviation of 20%. The rest of her wealth is invested in the risk-free asset, which yields 6%. What are the expected return and standard deviation of her portfolio?
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%
The risk-free rate is 5%. A risky portfolio has an expected return of 10% and a standard deviation of return of 20%. If you want to form a complete portfolio from these two assets, and you want this portfolio to have an expected return greater than 5% but less than 10% what must you do? Assume that all borrowing and lending can be done at the risk-free rate. a. Lend at the risk free rate b. borrow at the risk...
3) Assume that you manage a risky portfolio with an expected rate of return of 14% and standard deviation of 19%. The risk-free rate rate on a Treasury-bill is 6%. a. Your client chooses to invest 60% of a portfolio in your fund and 40% in a risk-free T-bill money market fund. What is the expected return and standard deviation of your client's portfolio? b. Suppose another investor decides to invest in your risky portfolio a proportion (w) of his...
You invest $100 in a risky asset with an expected rate of return of 0.11 and a standard deviation of 0.21 and a T-bill with a rate of return of 0.045. What percentages of your money must be invested in the risk-free asset and the risky asset, respectively, to form a portfolio with a standard deviation of 0.08?
You invest $100 in a risky asset with an expected rate of return of 0.11 and a standard deviation of 0.21 and a T-bill with a rate of return of 0.045. 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 0.13? Group of answer choices a)57.75% and 42.25% b)Cannot be determined. c)67.67% and 33.33% D)130.77% and –30.77% e)–30.77% and 130.77%
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...
12. An investor invests 40% of his wealth in a risky asset with an expected rate of return of 15% and a variance of 0.04 and 60% in a treasury bill that pays 6%. Her portfolio's expected rate of return is and her portfolio return's standard deviation is 1) 8.0%, 12% 2) 9.6%, 8% 3) 11.4%, 10% 4) 13%, 12% moto of 4% One year
5 Consider a Treasury bill with a rate of return of 5% and the following risky securities: Security A: E/) = .15; variance = .0400 Security B: En = 10; variance = .0225 Security C: 1) = .12; variance = 1000 Security D: 0) = .13; variance = .0625 The investor must develop a complete portfolio by combining the risk-free asset with one of the securities mentioned above. The security the investor should choose as part of her complete portfolio...