What is the reward-to-volatility ratio for the equity fund

Assignment Help Accounting Basics

Reference no: EM131910082

Problem

You manage an equity fund with an expected risk premium of 10.2% and a standard deviation of 16%. The rate on Treasury bills is 4%. Your client chooses to invest $40,000 of her portfolio in your equity fund and $60,000 in a T-bill money market fund. What is the reward-to-volatility ratio for the equity fund?

Reference no: EM131910082

Questions Cloud

What is the gross profit per picture frame : The managerial accountant at Picture Frame Manufacturing reported that the company plans to transfer $250,000. What is the gross profit per picture frame?

Why may an investor prefer a debenture with a put feature : Would you agree that convertible bonds are less risky than corporate stock but usually more risky than nonconvertible bonds? WHY?

What new ytm would make the portfolio lose half its value : What would be the effect of a 100 basis point reduction in yields on the value of the bond portfolio?What new YTM would make the portfolio lose half its value?

What is the cost of equity from retained earnings : What is the cost of equity from retained earnings based on the DCF approach?

What is the reward-to-volatility ratio for the equity fund : You manage an equity fund with an expected risk premium of 10.2% and a standard deviation of 16%. What is the reward-to-volatility ratio for the equity fund?

Compute the wacc using market value weights and costs : a) Compute the WACC using market value weights and costs b) Compute the book value Debt/Equity ratio

What is the forward pe ratio for verizon : a) What is the forward P/E ratio for Verizon? b) What is the required rate of return on VZ stock according to the CAPM?

Explain the limitation of basic cost-volume-profit analysis : Briefly explain the terms contribution margin and contribution margin ratio. Explain the limitation of basic cost-volume-profit analysis.

What would be your annualized discount rate percentage : What would be the annualized discount rate percentage and the annualized investment rate% if a treasury bill was purchased for 9360 maturing ?

User Account

All Pages