Question: Stocks have a 12% expected return and 22% risk. Bonds have a 7% expected return and 10% risk. The expected return of a portfolio comprised

Stocks have a 12% expected return and 22% risk.

Bonds have a 7% expected return and 10% risk.

The expected return of a portfolio comprised of 70% stock and 30% bond is?

Step by Step Solution

★★★★★

3.40 Rating (156 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

ANSWER Solution i Expected return stock Ers 12 ii Exp... View full answer

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!

Which company was referenced in the video as one Papa Johns chose to benchmark? a) McDonalds b) Arbys c) Wendys d) KFC

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...

Alpha LLC, a US hedge fund, considers investing in both bonds and stocks inSingapore market. Two straight bonds and two SGX stocks are shortlisted by AlphaLLC. Bond P has a par value of $1,000,...

2.1 Th e following data represent the aft ernoon high temperatures in Celsius for 50 construction days during a year in Barcelona. 10 26 22 13 23 25 27 8 13 13 17 33 4 12 12 16 21 13 22 33 8 9 32 7 6...

Jennifer just had her 4th birthday and her parents have decided to save money to pay for her college education. They will invest $27,000 right now, and $10,000 each year on her future birthdays for...

1 What are the main components of personal financial planning? Solve What is the purpose of a financial plan? Solve Identify some common actions taken to achieve financial goals. How does a job...

number 6 attached below , there is also the solution at the end..but just to explain to me how to do this type of problems for the exam thanks CORPORATE FINANCE AND FINANCIAL INSTITUTIONS II part...

Becky and Mandy are arguing about the valuation approach of a firm. Mandy argues that ignoring the present value of future growth opportunities could grossly underestimate the value of a firm that is...

HTBM Ltd. has an outstanding issue of bond with a par value of $1,000, paying 8 percent coupon rate semi-annually. And, the company just paid a dividend of $2.70 per share. The dividends are expected...

1)Assume that treasury bills rate is 12%, beta is 1.5 and the risk premium is 5%. Determine whether stock "A" is over or undervalued if its expected return is 25%? 2)2) (A) Calculate the expected...

1. A comparable house property sold one year ago for $209,567 and has three bedrooms and two bathrooms and a fireplace. Your subject property has four bedrooms and three bathrooms and no fireplace. A...

Given three lightbulbs and a battery, sketch as many different electric circuits as you can.

Solve for x only in the following set of simultaneous equations by using D - operator methods: Dx ( D 1 ) y = 2 et x + ( D 1 ) y = e 3 t

The daily number of kayaks sold, X, at a water sports store has the probability distribution align="center"> (a) Find the expected number of kayaks sold in a day. (b) Find the standard deviation of...

Donna Jamison was recently hired as a financial analyst by Computron Industries, a manufacturer of electronic components. Her first task was to conduct a financial analysis of the firm covering the...

Bliny Corporation makes a product with the following standard costs for direct material and direct labor: During the most recent month, 5,000 units were produced. The costs associated with the months...

ILK has preferred stock selling for 97 percent of par that pays an 8 percent annual coupon. What would be ILKs component cost of preferred stock?

The auto repair shop of Quality Motor Company uses standards to control the labor time and labor cost in the shop. The standard labor cost for a motor tune-up is given below: The record showing the...

Operations planning is often divided into long-term, intermediate-range, and short-term horizons. Each type of plan involves different decisions, levels of detail, and planning responsibilities....

The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-6. On December 12, Irene purchased the building where her store is located. She paid...

Indicate, in each of the following situations, the number of exemptions the taxpayers are entitled to claim on their 2012 income tax returns. Number of Exemptions a. Donna, a 20-year-old single...

In 2012, Margaret and John Murphy are married taxpayers who file a joint tax return with AGl of $25,000. During the year they incurred the following expenses: Hospitalization insurance...

13. What is the relationship between orexin and narcolepsy?

10. Why do most antihistamines make people drowsy?

9. What would happen to the sleepwake schedule of someone who took a drug that blocked GABA?