What percentage of risky portfolio will maximize utility

Assignment Help Financial Econometrics
Reference no: EM13335069

A fund has expected risk premium of 8% and an expected SD of 20%. T-Bill is 3%. Utility function is U=E(r)-2.5SD^2. What percentage of risky portfolio will maximize utility? What is the E(r) and SD of combined portfolio?

Reference no: EM13335069

Questions Cloud

Integrated software application for patient records mgmt : Assume that you have been asked to procure a new integrated software application for patient records management.
What is the angular speed of the bar : A small 15.0-g bug stands at one end of a thin uniform bar that is initially at rest on a smooth horizontal table. What is the angular speed of the bar just after the frisky insect leaps
What is the expected rate of return on the market : The expected rate of return on stock in Company D is currently 10%. Company D has a Beta of 1.40. If the risk free rate of interest is currently 3%, what is the expected rate of return on the market
Establish a uniform system of reporting : What are the problems when an MNC tries to establish a uniform system of reporting for its worldwide operations? How can these problems be solved?
What percentage of risky portfolio will maximize utility : A fund has expected risk premium of 8% and an expected SD of 20%. T-Bill is 3%. Utility function is U=E(r)-2.5SD^2. What percentage of risky portfolio will maximize utility
Determine what is clarks wacc to fund capital projects : Clark Communications has a capital structure that consists of 70% common stock and 30% long-term debt. In order to calculate Clark's WACC, an analyst has accumulated the following information
The steady state total output grows at what percent rate : In a Solow Growth model with technological change, if population grows at a 2 percent rate and the efficiency of labour grows at a 3 percent rate, then the steady state total output grows at what percent rate?
Human capital management and human resources management. : Discuss the key elements in the definition of Human Capital (HC) in relation to differentiating between the study of Human Capital Management and Human Resources Management.
Determine the taxable year of the llc : Determine the taxable year of the LLC under the Code and Regulations and two years after formation of the LLC, Barney sells half of his interest (25%) to Aldrin, Inc. Can the LLC retain the taxable year determined in part (a)? Why or why not?

Reviews

Write a Review

Financial Econometrics Questions & Answers

  Should pettit relax collection efforts at opportunity cost

The Pettit Corporation has annual credit sales of $2 million. Current expenses for the collection department are $30,000, bad debt losses are 2% and the days sales outstanding is 30 days.

  Calculate the typical pay before overtime was cut

Full-time employees (40 hours per week) at the local steel mill were used to earning up to 10 hours of overtime in a two-week time period. They would typically work five overtime hours Monday through Friday and five overtime hours on the weekend.

  What is probability that at least respondents have boycotted

A survey on British Social Attitudes asked respondents if they had ever boycotted goods for ethical reasons (Statesman, January 28, 2008). The survey found that 21% of the respondents have boycotted goods for ethical reasons.

  Find what value would be assigned the existing roof

A new roof would last 20 years, but would cost $20,000. The house is expected to last forever. Assuming the costs will remain constant and that the interest rate is 5% what value would you assign the existing roof

  What kind of deal did the running back scamper off with

In September 2011, the Tennessee Titans signed running back Chris Johnson to a contract reportedly worth $56 million. Johnson's salary included a $10 million signing bonus to be paid immediately and $3 million in salary for 2011.

  What is the percentage change in the price of the bonds

Bond J has a coupon rate of 4 percent. Bond S has a coupon rate of 14 percent. Both bonds have 10 years to maturity, make semiannual payments, and have a YTM of 8 percent.

  How sensitive is the npv to changes in the price of pda

Conch Republic Electronics is a midsized electron- ics manufacturer located in Key West, Florida. The company president is Shelly Couts, who inherited the company.

  How much are dexter willing to pay today per share

Dexter Mills issued 20-year bonds a year ago at a coupon rate of 10.2 percent. The bonds make semiannual payments. The yield-to-maturity on these bonds is 9.2 percent. What is the current bond price

  What is the best estimate of the future annual returns

Over a 38-year period an asset had an arithmetic return of 12.40 percent and a geometric return of 10.30 percent. Using Blume's formula, what is your best estimate of the future annual returns over 6 years

  Determine how much interest is paid in the second year

Yare hired as a financial planner. work out an amortization schedule for a nine-year loan of $90,000 which requires equal annual payments. The interest rate is 4.5% per year.

  Determine what is qms weighted average cost of capital

If the cost of common equityfor the firm is 17.1%, the cost of prefered stock is 9.3%, the before tax cost of debt is 7.7% and the firms tax rate is 35%, what is QM's weighted average cost of capital

  Determine what is the present value of the investment

You have an investment with 16 quarterly cash flows of $2000. The first payment is 3 months from today. If the EAR is 9%, what is the present value of this investment

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