ZuoTi.Pro
Question

The market portfolio has an expected return of 9.2% with a volatility of 16.7% while the...

The market portfolio has an expected return of 9.2% with a volatility of 16.7% while the T-bills earn 3.6%. Your degree of risk aversion is 3. You have $50,000 to invest. How much (in $, NOT in %) will you invest in the market portfolio?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
The market portfolio has an expected return of 9.2% with a volatility of 16.7% while the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • The risk-free rate is 0%. The market portfolio has an expected return of 20% and a volatility of 20%. You have $100 to invest. You decide to build a portfolio P which invests in both the risk-free investment and the market portfolio.

    The risk-free rate is 0%. The market portfolio has an expected return of 20% and a volatility of 20%. You have $100 to invest. You decide to build a portfolio P which invests in both the risk-free investment and the market portfolio.a. How much should you invest in the market portfolio and the risk-free investment if you want portfolio P to have an expected return of 40%?b. How much should you invest in the market portfolio and the risk-free investment...

  • expected return

    a . Compute the expected return of the stocks A and B ? b . Compute the risks of the stocks A and B ? c . If the return of the Treasury Bills is 6 % . Compute the risk premium and the risk aversion of each stock d . Assume that you invest $ 120,000 in X and 30,000 in Y. Compute the expected return and the risk of your portfolio . e . Compute the reward to volatility of your portfolio...

  • Calculating expected return of a stock portfolio

    Stock J has a beta of 1.19 and an expected return  of 12.95 percent, while the stock K has a beta of 0.84, and expected return of 10.40 percent. You want a portfolio with the same risk as the market. How much you will invest in each stock? What is expected return of your portfolio?

  • The market portfolio has expected return of 12% and risk of 18%. The risk free rate...

    The market portfolio has expected return of 12% and risk of 18%. The risk free rate is 3%. According to CML, if you want to achieve 15% return, how much risk does your portfolio has to have?

  • 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...

  • For the following questions, assume that you manage a risky portfolio with an expected rate of...

    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...

  • 1. Suppose the volatility of Dell stock is 0.38 while that of Apple stock is 0.54...

    1. Suppose the volatility of Dell stock is 0.38 while that of Apple stock is 0.54 while the correlation of Dell with Apple stocks is 0.32. What is the volatility of a portfolio with equal amounts invested in Dell and Apple? 2. Suppose the risk premium is 7% while the risk free rate is 3.6% and that Charlie Inc. has a beta of -0.35. What is the required return on Charlie Inc.? Does your answer make sense? Why or why...

  • A mutual fund manager expects her portfolio to earn a rate of return of 9% this...

    A mutual fund manager expects her portfolio to earn a rate of return of 9% this year. The beta of her portfolio is 0.8. If the rate of return available on risk free assets is 4% and you expect the rate of return on the market portfolio to be 11%. Should you invest in this mutual fund? Show your work. Suppose you want to create a portfolio with the same risk as the fund manager’s portfolio above, however you only...

  • You currently have $55,000 invested in a portfolio that has an expected return of 11% and...

    You currently have $55,000 invested in a portfolio that has an expected return of 11% and a volatility of 10%. Suppose the risk-free rate is 6%, and there is another portfolio has an expected return of 20% and a volatility of 13% a. What portfolio has a higher expected return than your portfolio but with the same volatility? b. What portfolio has a lower volatility than your portfolio but with the same expected return?

  • You manage a risky portfolio that has an expected return of 9% and a standard deviation...

    You manage a risky portfolio that has an expected return of 9% and a standard deviation of returns of 12.5%. The T-bill rate is 3%. Your client wants to allocate her investment portfolio between your fund and T-bills to achieve an expected rate of return of 7%. What proportion of her portfolio should she allocate to the risky portfolio? What proportion to T-bills? What is the standard deviation of her portfolio? Another client wants to allocate his investment portfolio between...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT