Question: i need the answer to question 5 - - i have attached all the relevant info to help answer. ( if anything is incorrect, please
i need the answer to question i have attached all the relevant info to help answer. if anything is incorrect, please let me know so i may correct it thank you Suppose you created a stock portfolio by investing $ in High Tech and $ in Collections.
Calculate the expected return, the standard deviation, the coefficient of variation, and the Sharpe ratio for
this portfolio, and fill in the appropriate blanks in the table. Using data from number : The yield curve is currently flat; that is longterm Treasury bonds also have a
yield. Consequently, Merrill Finch assumes that the riskfree rate is
Write out the SML equation, use it to calculate the required rate of return on each alternative. How do the expected rates of return compare with the required rates of return?
What would be the market risk and the required return of a portfolio of High Tech and Collections? For a portfolio consisting of High Tech and US Rubber?
Suppose investors raised their inflation expectations by percentage points over current estimates as reflected in the riskfree rate. What effect would higher inflation have on the SML and on the returns required on high and lowrisk securities
Suppose instead that investors' risk aversion increased enough to cause the market risk premium to increase by percentage points. Inflation remains constant. What effect would this have on the SML and on returns of high and lowrisk securities
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