Return on treasury bills, Correlation coefficient between

Return on treasury bills

Reference no: EM13194915

You have £10,000 and are offered two investment products by a fund manager. The first product is a portfolio that consists of £6,000 worth of risk free treasury bills and £4,000 worth of QW plc shares. The second product is a portfolio that consists of £1,000 worth of QW plc shares and £9,000 worth of CX plc shares. The following information is available:

Return on treasury bills 4% per annum

(0.04 p.a.)

Expected rate of return on QW plc shares 15% per annum

(0.15 p.a.)

Standard deviation of QW plc shares 0.35

Expected rate of return on CX plc shares 7.7% per annum

(0.077 p.a.)

Standard deviation of CX plc shares 0.15

Correlation coefficient between QW and CX shares 0.40

Which one of these investment portfolios would you choose and why?

Reference no: EM13194915

Questions Cloud

Compute the standard free energy change for silver sulfate : Calculate the standard free energy change for silver sulfate dissolution at 25 degrees Celsius.

Define what is the dilution factor of the solution : volumetric flask and dilute to the mark with distilled water. Then, pipet 2 mL of this diluted solution into a 50.00 mL volumetric flask and dilute to the mark with distilled water. What is the dilution factor of the final solution?

What was last years dividend per share : Fauver Enterprises declard a 4 for 1 stock split last year, andthis year its dividend is $1.10 per share. This total dividend payout represents a 6% increase overlast year's pre-split dividend payout. What was last year's dividend per share? Round..

Explain what is the heat capacity of the calorimeter : After adding the two portions into the calorimeter setup and following the procedure outlined in the experiment, you determine the temperature of the mixed portions of water to be 45*C. what is the heat capacity of the calorimeter?

Return on treasury bills : Correlation coefficient between QW and CX shares 0.40 - which one of these investment portfolios would you choose and why?

Explain when hydrogen sulfide gas is bubbled : When hydrogen sulfide gas is bubbled into a solution of sodium hydroxide, the reaction forms sodium sulfide and water. How many grams of sodium sulfide are formed if 2.00 g of hydrogen sulfide

Define the molecular equation for the reaction : What two aqueous reactants might you combine to give a barium sulfate precipitate? Write the molecular equation for the reaction that would result.

Compute the fair value of a chooser option : Compute the fair value of a chooser option which expires aftern=10periods. At expiration the owner of the chooser gets to choose

Compute the ph after the volumes of acid : A 20.0 mL sample of 0.150 M KOH is titrated with 0.125 M HClO4 solution. Calculate the pH after the following volumes of acid have been added.

User Account

All Pages