Consider a U.S. pension fund with the following performance: Is the risk-return performance of the foreign portfolio
Question:
Is the risk-return performance of the foreign portfolio attractive?
Standarod Deviation o Return(%) 15 20 Percentage Total Portfolio Total Dollar Return (%) 10 Correlation with U.S Stock Index U.S. equity Foreign equity 90 10 0.99 -0.10
Step by Step Answer:
Yes The risk that counts is the contribution of the foreign assets to the total risk of th...View the full answer
Related Video
Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
Students also viewed these Accounting questions
-
The beta of Tasty Foods stock of 1.10 used by Rae in computing the required return on equity was based on monthly returns for the past 10 years. If Rae uses daily returns for the past 5 years, the...
-
Consider a U. S. corporation with a single foreign branch in Greece. Suppose the firms foreign taxes paid are less than the foreign tax credit limitation and the firm expects to remain in this...
-
A U.S. pension fund wants to invest $1 million in foreign equity. Its board of trustees must decide whether to invest in a commingled index fund tracking the EAFE index or to give the money to an...
-
Strike Bowling installs automatic scorekeeping equipment with an invoice cost of $180,000. The electrical work required for the installation costs $8,000. Additional costs are $3,000 for delivery and...
-
During a three-year period, Craig Excavation completed the following transactions pertaining to its front-end loader: Year 1 June 30 Bought a front-end loader, $ 39,500, paying $ 15,500 in cash and...
-
A 2019 study conducted by eMarketer asked 800 US smartphone users whether they had used a food delivery app at least once in the last month. The survey also asked which food delivery app, if any, was...
-
The ogive at the right represents the cumulative frequency distribution for SAT scores of college-bound students in a recent year. What score represents the 80th percentile? Percentile 100 90 80 70...
-
Pargo Corporation produces industrial robots for high-precision manufacturing. The following information is given for Pargo Corporation. The company has a desired ROI of 20%. It has invested assets...
-
1. You have been dispatched to 123 Anywhere St. for a neighbour dispute.The complainant is the homeowner, Amanda. As you arrive, Matteo, the basement tenant, is waiting for you outside.Matteo tells...
-
Armin Production produces cookies for resale at grocery stores throughout the country. The company is currently in the process of establishing a master budget on a quarterly basis for this coming...
-
A U.S. pension fund has a domestic portfolio with an expected return of 10 percent and a standard deviation of 12 percent. It also invests in a foreign equity fund that has an expected dollar return...
-
You are provided with annual rates of return for a portfolio and relevant benchmark index for the years 2008 to 2012. Calculate the tracking error for the portfolio. Year 2008 2009 2010 2011 2012...
-
a. Does Tor try to achieve confidentiality for the original message? 24a.) Tor provides confidentiality _________. a. Only between the source host and the first Tor router b. All the way to the...
-
Is the word propaganda a specific term or is it too general to be used in an array of different contexts.
-
Define some research issues of this chapter and give reasons for how one can solve them.
-
How do different BOs interact with each other and act in combination to create a pattern for deployment. Write an exhaustive scenario where different BOs play their roles.
-
Do they work as a team to make the pattern stable and robust?
-
Identify and list different BOs for this pattern.
-
In Exercises solve for x or b. (a) log b 27 = 3 (b) log b 125 = 3
-
What is an access control list?
-
What is a postaudit? How is it useful in capital budgeting?
-
Identifying cash inflows and outflows Required Indicate which of the following items will result in cash inflows and which will result in cash outflows. The first one is shown as an example. Item...
-
Determining the present value of a lump-sum future cash receipt Stan Sweeney turned 20 years old today. His grandfather had established a trust fund that will pay him $80,000 on his next birthday....
-
Calculate the following showing all the necessary steps: Note: CPP rate to be used in the calculation is 5.95%. Note: Don't forget to deduct pay period exemption\ \ Tanya earns $25.00 per hour. This...
-
Harley-Davidson, inc. (HOG), is a leading motorcycle manufacturer in the United States. The company manufactures and sells a number of different types of motorcycles, a complete line of motorcycle...
-
What is the net income for this period and total assets on this balance sheet Use the following adjusted trial balance to answer questions 22-25. Cash $ 6,530 Accounts Receivable 2,450 Prepaid...
Study smarter with the SolutionInn App