A friend tips you off on a hot stock: Sure Thing Mines Ltd. You only have...
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A friend tips you off on a hot stock: Sure Thing Mines Ltd. You only have $10,000 to invest but you want to invest more. Assume that you can borrow an additional $5,000 by short-selling the risk free asset (issuing T-Bills). You purchase $15,000 worth of shares in Sure Thing Mines Ltd. The expected returns and standard deviations of the two assets are outlined in the table below: Asset T-Bills Sure Thing Mines Expected Return. 5.5% 15% Beta 0 1.70 What is the expected return of the portfolio? A friend tips you off on a hot stock: Sure Thing Mines Ltd. You only have $10,000 to invest but you want to invest more. Assume that you can borrow an additional $5,000 by short-selling the risk free asset (issuing T-Bills). You purchase $15,000 worth of shares in Sure Thing Mines Ltd. The expected returns and standard deviations of the two assets are outlined in the table below: Asset T-Bills Sure Thing Mines Expected Return. 5.5% 15% Beta 0 1.70 What is the expected return of the portfolio?
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Lets denote the weight of TBills as wT and the weight of Sure Thing Mines Ltd as ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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