Question: Expected Return Standard Deviation Stock fund (S) 25% 40% Bond fund (B) 12% 15% Using the table above, you require that your portfolio yield an

Expected Return

Standard Deviation

Stock fund (S) 25%

40%

Bond fund (B) 12%

15%

Using the table above, you require that your portfolio yield an expected return of 16%, and that it be efficient, on the best feasible CAL.

  1. What is the standard deviation of your portfolio?

  2. What is the proportion invested in the T-bill fund and each of the two risky funds?

Useful formulas: () = + h ( ) = + (() )

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!

Q:

Expected return Standard Deviation Stock fund (s) 20% 30% Bond Fund (B) 12% 15% THE CORRECTION BETWEEN THE FUND RETURNS IS .10 If you were to use only the two risky funds, and still require an...

Q:

Expected Return Standard Deviation Stock fund (S) 20% 30% Bond fund (B) 12% 15% Correlation = .10 7. If you were to use only the two risky funds, and still require an expected return of 14%, what...

Q:

Using the data in the table, answer the questions that follow. Asset Expected Return Standard Deviation Stock Fund S 18% 30% Bond Fund B 9% 20% T-Bills 5% -- The correlation coefficient between the...

Q:

This data applies to the problems that follow below: Expected Return Standard Deviation Stock Fund S 13% 25% Bond Fund B 6% 16% The correlation between the fund returns is .22 T Bill money market...

Q:

Expected return Standard Deviation Stock fund (S) 12% 20% Bond Fund (B) 6% 10% A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long term bond...

Q:

Using the data in the table, answer the questions that follow. Asset Expected Return Standard Deviation Stock Fund S 18% 30% Bond Fund B 9% 20% T-Bills 5% -- The correlation coefficient between the...

Q:

Using the data in the table, answer the questions that follow. Asset Expected Return Standard Deviation Stock Fund S 18% 30% Bond Fund B 9% 20% T-Bills 5% -- The correlation coefficient between the...

Q:

Using the data in the table, answer the questions that follow. Asset Expected Return Standard Deviation Stock Fund S 18% 30% Bond Fund B 9% 20% T-Bills 5% -- The correlation coefficient between the...

Q:

Using the data in the table, answer the questions that follow. Asset Expected Return Standard Deviation Stock Fund S 18% 30% Bond Fund B 9% 20% T-Bills 5% -- The correlation coefficient between the...

Q:

Show work please Question 4 2 pts The following data applies to Questions 4 and 5. Consider the following two risky assets: Expected return (%) Standard Deviation (%) Stock fund (S) 15 32 Bond fund...

Q:

What are the six steps that define the design of an activity-based costing system?

Q:

Using the matrix of intercity distances in the American Baseball League file, add list box form controls so that the user can choose two cities (using two list boxes) and find the distance between...

Q:

What amount do venture capitalists tend to invest? Multiple Choice Question over $ 1 0 0 million starting around $ 1 million an amount equal to 5 0 % ownership less than $ 5 0 , 0 0 0

Q:

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par...