Question: 1. (45 points) Please calculate the expected returns for Vanguard Long-term Investment Grade fund. (a) Please calculate the expected returns for both of the funds

1. (45 points) Please calculate the expected returns for Vanguard Long-term Investment Grade fund. (a) Please calculate the expected returns for both of

1. (45 points) Please calculate the expected returns for Vanguard Long-term Investment Grade fund. (a) Please calculate the expected returns for both of the funds individually. (b) Please calculate the standard deviation of annual returns for both of the funds individually. (c) Please calculate the Sharpe ratios for both of the funds individually. (d) Please calculate the correlation coefficient between the two funds. (e) Please calculate the proportions for each of the funds in the optimal risky portfolio. (f) Please calculate the expected returns for the optimal risky portfolio. (g) Please calculate the standard deviation of returns for the optimal risky portfolio. (h) Please calculate the Sharpe ratio for the optimal risky portfolio. (i) Lastly, please calculate the proportion of the complete portfolio that would be the risky portfolio if your client had a risk-aversion score (A) equal to 2 . \begin{tabular}{|c|c|c|c|c|} \hline & Vanguard Long- & Investment Grade (Bonds) & Fidelity Fund (Equity) & Risk-free rate \\ \hline Year & Annual Returns & & Annual Returns & 4% \\ \hline 1990 & 6.21 & & -5.1 & \\ \hline 1991 & 20.9 & & 24.15 & \\ \hline 1992 & 9.78 & & 8.46 & \\ \hline 1993 & 14.49 & & 18.36 & \\ \hline 1994 & -5.3 & & 2.58 & \\ \hline 1995 & 26.4 & & 32.85 & \\ \hline 1996 & 1.2 & & 19.82 & \\ \hline 1997 & 13.78 & & 32.06 & \\ \hline 1998 & 9.21 & & 31 & \\ \hline 1999 & -6.23 & & 24.21 & \\ \hline 2000 & 11.76 & & -10.97 & \\ \hline 2001 & 9.57 & & -11.22 & \\ \hline 2002 & 13.22 & & -22.25 & \\ \hline 2003 & 6.26 & & 27.26 & \\ \hline 2004 & 8.94 & & 7.84 & \\ \hline 2005 & 5.13 & & 7.52 & \\ \hline 2006 & 2.86 & & 13.67 & \\ \hline 2007 & 3.75 & & 16.81 & \\ \hline 2008 & 2.29 & & -40.33 & \\ \hline 2009 & 8.75 & & 26.75 & \\ \hline 2010 & 10.71 & & 14.55 & \\ \hline 2011 & 17.18 & & -2.36 & \\ \hline 2012 & 11.66 & & 16.57 & \\ \hline 2013 & -5.87 & & 29.01 & \\ \hline 2014 & 18.17 & & 12.85 & \\ \hline 2015 & -2.21 & & 3.35 & \\ \hline 2016 & 7.81 & & 4.82 & \\ \hline 2017 & 11.93 & & 23.82 & \\ \hline 2018 & -5.95 & & -5.24 & \\ \hline 2019 & 20.41 & & 33.48 & \\ \hline 2020 & 15.35 & & 26.43 & \\ \hline 2021 & -2.39 & & 33.21 & \\ \hline 2022 & -25.62 & & -25.87 & \\ \hline \end{tabular}

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Please provide the excel formulas used to obtain the calculations. 1. (45 points) Please calculate the expected returns for Vanguard Long-term Investment Grade fund. (a) Please calculate the expected...

This assignment is due Monday, Dec. 4 at the beginning of class. Please make use of the Homework 5 spreadsheet found on Canvas in order to complete this homework. 1. (45 points) Please calculate the...

solve 1,2,3,4,5,6, Consider the following binomial tree of the price movement of a non-dividend-paying stock, assume the time period is one year (i.e., h 1), and the effective one-year interest rate...

Hoyt, Inc. has estimated current year sales (in millions) for the next four quarters. Q1 $240Q2 $250 Q3 $205 Q4 $350 ? Sales for the 1st quarter next year are projected to be $230.? Accounts...

Hi I just need you to help me to do a introduction about the paper you can read the whole paper simply and make a professional intro which has to be matched with the requirement. Introduction You are...

Could you help me with this homework for BUS405 Portfolio Analysis. 1. A stock had returns of 12 percent, 39 percent, and -12 percent over the past three years. What was the standard deviation of the...

1. A stock had returns of 12 percent, 39 percent, and -12 percent over the past three years. What was the standard deviation of the stock's returns? 2. If the standard deviation of a series of...

Dear tutor, I would like to seek help to solve this problem. I would to stress that you use the actual figure and number in the problem.I saw and experience with other tutor they just copy and paste...

An investor wants to use his/her saving to buy shares of a mutual fund. A manager in a security firm recommend two different stock funds. In order to select a better fund, the manager provides the...

You are to invest $100,000 for a client. Because the funds are to be invested in business(es) at the end of one year, you have been instructed to plan for a one-year holding period. Further, your...

Briefly describe each of the following terms: authorized shares, issued shares, and outstanding shares.

The table below contains the amount of money owed by four students upon graduation: a biology major from each of two universities, and an English major from each of the same two universities. Use...

The footnotes related to the financial statements provide valuable information about accounting policies as well as details with respect to account information. Skim through the footnotes and note...

Geoffrey Moore identified the biggest difficulty in the customer adoption cycle as the gap between which two groups? early adopters and innovators early majority and early adopters late majority and...

You work for a yoga studio in your community as an instructor. The manager has approached you about your thoughts on introducing a bonus based on the number of classes taught and the total number of...

What additional benefits would you recommend that APTN offer employees? Why?

You were recently promoted to a management position. Your company is in the retail grocery business and has a policy that managers are paid a salary instead of an hourly wage. What are the advantages...