Mutual fund-market index and the risk-free rate

Assignment Help Financial Management
Reference no: EM131085538

Consider the following information for a mutual fund, the market index, and the risk-free rate. You also know that the return correlation between the fund and the market is .97. Year Fund Market Risk-Free 2008 –17.00 % –33.5 % 2 % 2009 25.1 20.4 6 2010 13.3 12.1 2 2011 6.4 8.0 5 2012 –1.74 –3.2 3 What are the Sharpe and Treynor ratios for the fund?

Reference no: EM131085538

Questions Cloud

What is your total dollar return on investment : Four months ago, you purchased 1,200 shares of LBM stock for $9.30 a share. Last month you received a dividend payment of $.065 a share. Today, you sold the shares for $8.62 a share. What is your total dollar return on this investment?
What is the intrinsic value of this preferred stock : Sunny's BBQ Company recently issued $50.00 par-value preferred stock that pays an annual dividend of $16.00. Analysts estimate that the stock has a beta of 0.96. The current risk-free rate is 2.00% and the market risk premium (RM - RF) is 8.50%. Assu..
What is the pretax cost of debt-aftertax cost of debt : Jiminy’s Cricket Farm issued a bond with 30 years to maturity and a semiannual coupon rate of 6 percent 4 years ago. The bond currently sells for 95 percent of its face value. The company’s tax rate is 35 percent. a. What is the pretax cost of debt?
Two prices can dramatically increase profits for retailer : A retailer of winter coats prices each at $500 at the beginning of the selling season and after three months reduces the price of any unsold coats to $350. Using a simple demand function, show how charging two prices can dramatically increase profits..
Mutual fund-market index and the risk-free rate : Consider the following information for a mutual fund, the market index, and the risk-free rate. You also know that the return correlation between the fund and the market is .97. Year Fund Market Risk-Free 2008 –17.00 % –33.5 % 2 % 2009 25.1 20.4 6 20..
What is the portfolio standard deviation : You own a portfolio that has 35% invested in asset A, and 65% invested in asset B. Asset A’s standard deviation is 12% and asset B’s standard deviation is 18%. The correlation coefficient between the two assets is -0.7. The expected return on the por..
What are the uses of balance of payments data : What are the uses of Balance of Payments data? Describe the Current and Capital accounts of the Balance of Payments. Is the trade balance sensitive to exchange rates? Is the current account relevant in assessing macroeconomic-macrofinancial issues in..
What is involved in restoring equilibrium : Discuss interest rate parity by describing the process initiated by arbitrageurs when it is violated – that is, what is involved in restoring equilibrium? What is the rationale for claiming IRP can forecast exchange rates?
What is offshore banking about : What is offshore banking about? How did offshore banking start? How did the international crisis [OPEC] develop in the 1970’s and early 1980’s, and what was the result?

Reviews

Write a Review

Financial Management Questions & Answers

  Suppose the risk-free interest rate

Suppose the risk-free interest rate is 4% and the market portfolio has an expected return of 10% and a standard deviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.32. What is its expected return?

  Firm make according to the net present values

Which investment(s) should the firm make according to the net present values? Why? Which investment(s) should the firm make to the internal rates of return? Why? If all firms are reinvested at 15 percent, which investment(s) should the firm make? Wou..

  What was the return on equity for the company

The Earnings per Share (EPS) of company LMN for 2012 was $ 6. The Book Value per share of the company was $ 72. What was the Return on Equity (RoE) for the company?

  Find the annual financing cost of forgoing the cash discount

Determine the annual financing cost of forgoing the cash discount if the credit terms are "1/10, net 30" and the invoice is not paid until it is 20 days past due.

  The required rate of return on the market

The risk-free rate of return is 6%, the required rate of return on the market is 12%, and High-Flyer stock has a beta coefficient of 1.7. If the dividend per share expected during the coming year, D1, is $2.80 and g = 5%, at what price should a share..

  Explain tax implications of insurance

Explain tax implications of insurance (i.e. life insurance proceeds, health care reimbursement, flexible spending accounts, disability premiums/proceeds)

  Life is expected with no anticipated value thereafter

A new computer server costs $860,000, delivered and installed. Annual operating costs are $32,000. A five year life is expected with no anticipated value thereafter. Given a required rate of return of 12%, what is the equivalent annual cost of the se..

  What is the current stock price

Marcel Co. is growing quickly. The company just paid a dividend of $2.00. Dividends are expected to grow at a 25% rate for the next three years, with the growth rate falling off to a constant 5% thereafter. If the required return is 7%, what is the c..

  Cumulative net cash flow

The net cash flow for a firm in January, February, and March are −$3.1 million, −$3.6 million, and $3.0 million. What is the cumulative net cash flow for March?

  Interest rate that is what would be present value of loan

Assume a bank loan requires an interest payment of $85 a year and principal payment of $1,000 at the end of the loan date/year life. How much this loan could be sold for to another bank if the loans of similar quality care of a 8.5% interest rate tha..

  Consider a firm that pays no dividends-find price per share

Consider a firm that pays no dividends. Next year’s earnings are projected to be $1,500,000. The present value of growth opportunities is estimated to be $13,500,000. Suppose that there are 250,000 shares outstanding. If investors require a return of..

  What is the yield to call for this bond

Fooling Company has a 13.6 percent callable bond outstanding on the market with 25 years to maturity, call protection for the next 10 years, and a call premium of $75. What is the yield to call (YTC) for this bond if the current price is 19 percent o..

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