If you invest half of your fund in a risky asset (market portfolio) and half in...
If you invest half of your fund in a risky asset (market portfolio) and half in a risk free asset, which of the following is true?
A. You will have half of the risky asset's return and half the market risk.
B. You will have half the risky asset's return and half of the risk free asset's return and no risk.
C.You will have half of the risky and risk free asset's return and half of the market risk.
D. You will have half of the risky and risk free asset's return and no risk.
Homework Answers
Option C is correct.
You will have half of the risky and risk free asset's return and half of the market risk
Add Answer to:
If you invest half of your fund in a risky asset (market portfolio) and half in...
You invest $100 in a complete portfolio. The complete portfolio is composed of a risky asset...
You invest $100 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 12% and a standard deviation of 10% and a treasury bill with a rate of return of 5%. __________ of your complete portfolio should be invested in the risk-free asset if you want your complete portfolio to have a standard deviation of 9%.
You have $100,000 that you want to invest in a risky asset portfolio; M. Portfolio M...
You have $100,000 that you want to invest in a risky asset portfolio; M. Portfolio M has an expected return of 20% and a standard deviation of 30%. You also want to borrow an extra $50,000 at a risk-free rate of 8% and invest in the risky portfolio. Calculate the expected return and standard deviation of this portfolio. What type of portfolio is this and what type of investors will invest in this portfolio?
You invest $100 in a complete portfolio. The complete portfolio is composed of a risky asset...
You invest $100 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 12% and a standard deviation of 15% and a treasury bill with a rate of return of 5%. % of your money should be invested in the risk-free asset to form a complete portfolio with an expected rate of return of 9%. Hint: Eſrc)=y.E(rp)+(1-y).rf Your answer must be in two digits with no decimal. Round off your...
a. Portfolio Man wants to create a portfolio as risky as the market and he has...
a. Portfolio Man wants to create a portfolio as risky as the market and he has $1,000,000 to invest. Given this information, fill in the three missing values of the following table: Asset Investment Beta $170,000 1.6 $140,000 1.5 $130,000 D $200,000 Risk-free asset b. An asset's reward-to-risk ratio is defined as its risk premium divided by its standard deviation. It is a useful statistic to summarize the asset's risk-return trade-off. Consider the following information: Stock A has a reward-to-risk...
12 You want to create a portfolio equally as risky as the market, and you have $1,000,000 to invest. You must invest al...
12 You want to create a portfolio equally as risky as the market, and you have $1,000,000 to invest. You must invest all of your money. Your portfolio already contains assets A and B, and you need to decide how much of asset C and of the risk-free asset to buy. More detailed information is given below: 5.25 points Asset Investment Stock A $ 280,000 Stock B $ 400,000 Stock C Risk-free asset Beta 0.95 1.20 1.45 eBook Print References...
You manage a risky portfolio with an expected return of 12% and a standard deviation of 24%. Assume that you can invest...
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 that you have a risky asset that provides you with an expected return of 12%...
Suppose that you have a risky asset that provides you with an expected return of 12% per year with 20% volatility (standard deviation). Consider a risk-free asset that provides you with a 3% risk-free return. a. If you have $100,000 and invest 80% into the risky asset and 20% into the 6. b. How much will your portfolio be worth if the realized return on the risky c. If you cannot borrow money, what is the maximum possible expected return...
You invest $100 in a portfolio. The portfolio is composed of a risky asset with an...
You invest $100 in a portfolio. The portfolio is composed of a risky asset with an expected rate of return of 12% and a standard deviation of 15% and a Treasury bill with a rate of return of 5%. What proportion of your total portfolio should be invested in the risky asset to form a portfolio with an expected rate of return of 9%?
You invest $100 in a portfolio. The portfolio is composed of a risky asset with an...
You invest $100 in a portfolio. The portfolio is composed of a risky asset with an expected rate of return of 12% and a standard deviation of 15% and a Treasury bill with a rate of return of 5%. What proportion of your total portfolio should be invested in the risky asset to form a portfolio with an expected rate of return of 9%?
3) Assume that you manage a risky portfolio with an expected rate of return of 14%...
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 complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 12% and a standard deviation of 15% and a treasury bill with a rate of return of 5%. % of your money should be invested in the risk-free asset to form a complete portfolio with an expected rate of return of 9%. Hint: Eſrc)=y.E(rp)+(1-y).rf Your answer must be in two digits with no decimal. Round off your...
a. Portfolio Man wants to create a portfolio as risky as the market and he has $1,000,000 to invest. Given this information, fill in the three missing values of the following table: Asset Investment Beta $170,000 1.6 $140,000 1.5 $130,000 D $200,000 Risk-free asset b. An asset's reward-to-risk ratio is defined as its risk premium divided by its standard deviation. It is a useful statistic to summarize the asset's risk-return trade-off. Consider the following information: Stock A has a reward-to-risk...
12 You want to create a portfolio equally as risky as the market, and you have $1,000,000 to invest. You must invest all of your money. Your portfolio already contains assets A and B, and you need to decide how much of asset C and of the risk-free asset to buy. More detailed information is given below: 5.25 points Asset Investment Stock A $ 280,000 Stock B $ 400,000 Stock C Risk-free asset Beta 0.95 1.20 1.45 eBook Print References...
Suppose that you have a risky asset that provides you with an expected return of 12% per year with 20% volatility (standard deviation). Consider a risk-free asset that provides you with a 3% risk-free return. a. If you have $100,000 and invest 80% into the risky asset and 20% into the 6. b. How much will your portfolio be worth if the realized return on the risky c. If you cannot borrow money, what is the maximum possible expected return...
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...
Most questions answered within 3 hours.
-
List and compare different forms of passive transport and active
transport.
asked 42 seconds ago -
In Netherland Dwarf rabbits, dwarf size is determined by allele
N, and normal-size by allele n....
asked 7 minutes ago -
During Heaton Company’s first two years of operations, it
reported absorption costing net operating income as...
asked 21 minutes ago -
Consider testing the
hypotheses:
H0: p = 0.56
H1: p > 0.56
where p is
the...
asked 24 minutes ago -
In a two-factor analysis of variance a main effect is defined as
____.
a. the unique...
asked 31 minutes ago -
A bank's loan officer rates applicants for credit. The ratings
are normally distributed with a mean...
asked 32 minutes ago -
Fill in the following information for Adipic Acid: molecular
weight, g or ml, mole, melting point,...
asked 37 minutes ago -
how
to use a for loop to iterate over the string below and print each
character...
asked 39 minutes ago -
Please type answer, Thanks.
Respond to the following in a minimum of 175
words:
Research industry...
asked 39 minutes ago -
Assume that all interest rates in the economy increase from 9
percent to 10 percent. Which...
asked 49 minutes ago -
Describe the function of a Change Control Board.
When calculating Planned Value (PV), what is the...
asked 54 minutes ago -
The customer help center in your company receives calls from
customers who need help with some...
asked 1 hour ago