What is sharpe measure of your resulting complete portfolio

Assignment Help Financial Management
Reference no: EM131010322

You invest $100,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 15% and a standard deviation of 30% and a treasury bill with a rate of return of 2.0%. How much money should be invested in the risky asset to form a portfolio with an expected return of 8%? Be sure to convert your percentage weight in the risky asset to dollars. What is the Sharpe measure of your resulting complete portfolio in problem 1?

Reference no: EM131010322

Questions Cloud

The expected return on equity and volatility of equity : A single 5-year zero-coupon debt issue with a maturity value of $120 and the expected return on assets of 12%. the expected return on equity, the volatility of equity
Depreciated over five years using the straight-line method : Scott Investors, Inc., is considering the purchase of a $363,000 computer with an economic life of five years. The computer will be fully depreciated over five years using the straight-line method. The market value of the computer will be $63,000 in ..
Different between risky portfolio and the risk-free asset : A portfolio has an expected rate of return of 14% and a standard deviation of 22%. The risk-free rate is 4%. An investor has the following utility function:. U = E(r)-1/2(A)σ2 Which value of A makes this investor indifferent between the risky portfol..
Experienced the same number of turns as its peer group : Dana reports Inventory of $2,596,867, Cash of $1,228,073, COGS of $8,086,302, and Accounts Receivable of $2,359,372. Its benchmark peer group turns its inventory 7.7 times a year. What would Dana's new inventory level be if it experienced the same nu..
What is sharpe measure of your resulting complete portfolio : You invest $100,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 15% and a standard deviation of 30% and a treasury bill with a rate of return of 2.0%. What is the Sharpe measure of y..
Premium bond making semiannual payments : Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 10 percent, has a YTM of 8 percent, and has 14 years to maturity. Bond Y is a discount bond making semiannual payments. The bonds have a $1,000 par value. If interest..
How long does it take to collect its credit sales : A company reports the following financial information: Inventory $197; Accounts Receivable $275; Cash $84; Prepaid expenses $398; credit sales $1,905. How long does it take to collect its credit sales?
Save money to meet three objectives-retirement income : Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with a retirement income of $32,000 per month for 20 years, with the first payment received 30 years and 1 month from now. Second,..
Calculate the expected price per share of the common stock : The total asset turnover ratio TATO (Sales/TA) of XYZ is 1.60x, its net profit margin (NI/Sales) is 8%, and its debt is half its equity (i.e. D/E ratio is 1/2). The company has $6,000,000 in assets. Calculate XYZ’s return on equity (ROE). The common ..

Reviews

Write a Review

Financial Management Questions & Answers

  Distribution of the stock dividend

The company with the common equity accounts shown here has declared a 15 percent stock dividend when the market value of its stock is $31 per share. What would be the number of shares outstanding, after the distribution of the stock dividend?

  Determine the net present value of the project

Monk, Inc. is considering a capital budgeting project in Tunisia. The project requires an initial outlay of 1 million Tunisian dinar; the dinar is currently valued at $.70. Determine the net present value (NPV) of the project in each of the four poss..

  Value of stock according to the dividend discount model

Stock A has an expected dividend of $1.30 payable as of two years from now (i.e. it is not expected to pay any dividends over the first two years). After that, dividends are expected to grow at an annual rate of 1% forever. If the discount rate is 5%..

  Prepare a cash-flow budget and a profit budget

Prepare a cash-flow budget and a profit budget for Gringotts Ltd on the basis of Strategy 1. The budgets should be split into quarterly intervals showing cash-flow and profit forecasts for each individual quarter.

  What will be the risk-adjusted net present value of project

If management decides that all product line expansions have above-average risk and therefore should be evaluated at a 24 percent required rate of return, what will be the risk-adjusted net present value of the project?

  What percent of face value will you receive

A bond matures in 25 years, but is callable in 11 years at 123. The call premium decreases by 2 percent of par per year. If the bond is called in 16 years, what percent of face value will you receive? (

  Effect on price per share of stock and shareholder wealth

Stock Repurchase. Sleight Corporation is evaluating an extra dividend versus a share repurchase. In either case, $6,000 would be spent. Current earnings are $6 per share, and the stock currently sells for $52 per share. Evaluate the two alternatives ..

  At what price per jar would project npv equal zero

EMperor’s Clothes Fashions can invest $5 million in a new plant for producing invisible makeup. The plant has an expected life of 5 years, and expected sales are 6 million jars of makeup a year. Fixed costs are $3.8 million a year, and variable costs..

  The discount rate and the time increases-the future value

Other things equal, as the discount rate and the time increases, the future value:

  What would immanuel kants categorical imperative

You are an expert security software programmer who works in top secret for the national government of the country of Zulu. Late one afternoon, you come across an ominous email in which you learn that a small group of sinister government officials fro..

  What is the companys cash conversion cycle

The text identifies three principal components that jointly comprise the cash conversion cycle. The cash conversion cycle is defined as the average length of time a dollar is tied up in current assets, and it is determined by the interaction between ..

  Understanding supply chain and how the consumer can play a

understanding supply chain and how the consumer can play a critical role in the supply chain is an important part of

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