What is the expected return and standard deviation

Assignment Help Finance Basics
Reference no: EM131238358

1. Assume that you manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 27%. The T-bill rate is 7%. Your client chooses to invest 70% of a portfolio in your fund and 30% in a T-bill money market fund. What is the expected return and standard deviation of your client's portfolio?

2. You manage an equity fund with an expected risk premium of 10% and a standard deviation of 14%. The rate on Treasury bills is 6%. Your friend manages a bond fund with an expected return of 11% and a standard deviation of 11%. An investor puts $60,000 in your stock fund and $40,000 into your friend's bond fund. What is the expected return and standard deviation of the investor's portfolio? The correlation coefficient between the two funds is 0.65.

3.Assume that you manage a mutual fund with an expected rate of return of 18% and a standard deviation of 34%. The T-bill rate is 5.5%. An investor wants to invest in your fund and T-bills such that the standard deviation of the investor's total portfolio is 30%. How much is invested in your mutual fund and what is the expected return?

Reference no: EM131238358

Questions Cloud

What steps can an organization take to mitigate this : What decisions related to expatriates could organizations take to maximize the benefits to the company despite ongoing economic recessions? Do you think a company that paid more careful attention to selection could further boost their chances of s..
How is a j-k fl ip-fl op made to toggle : Given that 7483 is a 4-bit parallel adder chip, how do you build a 16-bit parallel adder circuits? Which factor limits the propagation delay of ripple counter? How is a J-K fl ip-fl op made to toggle?
Evaluating the contract option : Sam Braxton, the number one draft pick of the Phoenix Cardinals (NFL), and his agent are evaluating the following contract option.  The contract provides for a series of annual payments over the next three years.  What is the present value of thes..
What is basic sequential logic building block : What is basic sequential logic building block in which the output follows the data input as long as the ENABLE input is active?
What is the expected return and standard deviation : 1. Assume that you manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 27%. The T-bill rate is 7%. Your client chooses to invest 70% of a portfolio in your fund and 30% in a T-bill money market fund. What is..
Prepare general journal entries for the balance day : ACC101 - Fundamentals of Accounting Assignment. Adjusting the accounts and preparing financial statements - Prepare general journal entries for the balance day adjustments
Define multiplexer and binary decoder : Define priority encoder Define multiplexer. Define binary decoder. What are the two steps in gray to binary conversion? Write the names of Universal gates.
What are combinational circuits : What is Digital Electronics? What are combinational circuits? Define binary logic. Define logic gates. Define Truth Table. What is Min term? What is Max term? Define K Map. Define duality property. State De Morgan's theorem
Describe the importance of having a good understanding : With this knowledge and experience, describe, in your own words, the importance of having a good understanding of databases and database design. Why do you think it is important?

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Which of the following is an example of a financing

which of the following is an example of a financing activity?a issuing shares of common stock.b selling goods on

  Explain the economic exposure to the eur

Explain the economic exposure to the EUR from the perspective of the Tunisian JV partner and provide one recommendation how the French company could hedge its exposure to the TND.

  Let a0 100 a1 112 and s0 34 dollars is it possible to

let a0 100 a1 112 and s0 34 dollars. is it possible to find an arbitrage opportunity if the forward price of stock

  Discuss the effect of change on variability

Suppose you own stock in the Gentry corporation, and you read in the financial press that a recent bond offering has raised the firm's debt/equity ratio from 35% to 55%.

  Discuss differences between cash flow and accounting income

1. Discuss differences between cash flow and accounting income and why it is important to use cash flow in making capital budgeting decisions.2. How do companies generate ideas for capital projects? Give some examples of capital projects that compani..

  Summarised views of the concept and the solutions

Summarised views of the concept and the solutions found in The Goal to solve or alleviate the company

  Performance evaluation system in force

You have recently been appointed as the senior management accountant in a large listed company, Apple plc. Apple plc produces a wide variety of differently products (candy bars, chews and other sweets) in batches using various combinations of high..

  Which investment would you make

How much must you pay each year on a $300,000 mortgage that has a 20 year maturity and a 5% interest rate?

  Determine the value without leverage

Milton Corporations expects free cash flow of $5 million each year. Milton'scorporate tax rate is 35 percent, and its unlevered cost of capital is 15%. The firm also has outstanding debt of $19.05 million,

  Find the change in credit terms

Epstein Corporation, a wholesale distributor of jewelry, sells to retail jewelry stores on terms of "net 120." Its average collection period is 150 days. The company is considering the introduction of a 4% cash discount if the customer pays within th..

  Discounted cash flow techniques are capital budgeting

discounted cash flow techniques are capital budgeting techniques that take into account both the time value of money

  Capital co has a capital structure based on current market

capital co. has a capital structure based on current market values that consists of 43 percent debt 11 percent

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd