There are thousands of assets in the world. The S&P 500 portfolio has had an average return

Fantastic news! We've Found the answer you've been seeking!

Question:

There are thousands of assets in the world. The S&P 500 portfolio has had an average return of 8% per year over the past hundred years, and a standard deviation of 16%. The risk free rate is 2%. Assuming the CAPM is true:

A. What is the best portfolio you can form which has an expected return of 10%

B. What is the best portfolio you can form which has a standard deviation of 10%

Related Book For answer-question

Essentials of Business Statistics Communicating With Numbers

ISBN: 978-0078020544

1st edition

Authors: Sanjiv Jaggia, Alison Kelly

See More Books

Posted Date: Jun 03, 2019 05:04 AM

See More Questions

The historical returns on a portfolio had an average return of 8 percent and a standard deviation of 12 percent. Assume that returns on this portfolio follow a bell-shaped distribution. a. What...
Over a particular period, an asset had an average return of 5.1 percent and a standard deviation of 8.4 percent. What range of returns would you expect to see 95 percent of the time for this asset?...
A population has a mean and a standard deviation . Find the mean and standard deviation of the sampling distribution of sample means with sample size n. = 150, = 25, n = 50
What future directions may be interesting for comparative studies in corporate governance?
Refer to the information in PA8-1. March.......................275 April........................250 May.........................300 June.........................400 July..........................375...
CICA Handbook Section 5135, "The Auditor's Responsibility to Consider Fraud," requires auditors to plan and perform an audit to obtain reasonable assurance about whether the financial statements are...
Walt Disney reports the following information for its two Parks and Resorts divisions. Assume Walt Disney uses a balanced scorecard and sets a target of 85% occupancy in its resorts. Using Exhibit...
Markel Corporation's balance sheet at December 31, 2011, is presented below. During 2012, the following transactions occurred.1. Markel paid $2,500 interest on the bonds on January 1, 2012.2. Markel...
Data Wrangling Versus ETL On the basis of users, please differentiate extraction, transformation, and loading ( ETL ) from data wrangling. Also, mention which tool a business analyst would use: an...
Honda Motor Corporation of Japan is a leading international manufacturer of automobiles, motorcycles, all-terrain vehicles, and personal watercraft. As a Japanese company, it follows Japanese GAAP...
1. Brian, your boss, is sending some of your colleagues to a research conference overseas. He has asked the employees to use the hotel wi-fi to connect to the Internet and send daily reports back to...
WHAT IS THE STANDARD DEVIATION OF asset A are Asset A Possible outcomes Pessimistic Most likely Optimistic Probability 25 .45 .30 Returns (%) 10 12 16
Discuss possible reasons for size reducing particles of an active pharmaceutical ingredient that is processed in an oral solid dosage form manufacturing facility. Give a description of particle size...
Using the data in Figure 3.8.3, assume that all the annual increases are the same and assume that Ms. Johnson is able to keep the building for ten years and will be able sell the building at 5.555...
Oweninc has a current stock price of $13.70 and is expected to pay a $1.00 dividend in one year. If Oweninc's equity cost of capital is 11%, what price would Owenlnc's stock be expected to sell for...
When using a systematic random sample, we determine the interval (i) which is needed to select the 2nd through to the nth participant for the sample. How do we select the the first participant? a)...
As a project team you need to develop a project plan which includes the dot points listed below for the project brief above. Also please provide plan in project plan format with each dot point listed...
Solve for the equilibria of the following discrete-time dynamical systems Pr pt+1 = Pr+2.0(I-Pr)
Calculate the mean, the variance, and the standard deviation of the following discrete probabilitydistribution. 10 15 20 0.35 0.300.20 0.15
The length of components produced by a company is normally distributed with a mean of 6 cm and a standard deviation of 0.02 cm. Calculate the 1st, 2nd, and 3rd quartiles of the component length.
A phone manufacturer wants to compete in the touch screen phone market. Management understands that the leading product has a less than desirable battery life. They aim to compete with a new touch...
Based on the photographs in Figure 26.13, in which segment(s) is the Antp gene normally expressed? Figure 26.13: (a) Normal fly (b) Antennapedia mutant
The bush baby, a small African mammal, is a remarkable jumper. Although only about 8 inches long, it can jump, from a standing start, straight up to a height of over 7 feet! Use the particle model to...
Hicham El Guerrouj of Morocco holds the world record in the 1500 m running race. He ran the final 400 m in a time of 51.9 s. What was his average speed in mph over the last 400 m? A. 14.2 mph B. 15.5...

There are thousands of assets in the world. The S&P 500 portfolio has had an average return

Question:

Expert Answer:

A x 8 1 x 2 10 x 86 x 133 In... View the full answer

Essentials of Business Statistics Communicating With Numbers

Students also viewed these finance questions