Suppose that you are managing a portfolio with a standard deviation of 30% and an expected return

Fantastic news! We've Found the answer you've been seeking!

Question:

Suppose that you are managing a portfolio with a standard deviation of 30% and an expected return of 16%. The Treasury bill rate is 9%. A client wants to invest 19% of their investment budget in a T-bill money market fund and 81% in your fund.

1. What is the expected rate of return on your client's complete portfolio?

2. What is the standard deviation for your client's complete portfolio?

3. What is the Sharpe ratio of your client's complete portfolio?

4. What is the Sharpe ratio of the portfolio of risky assets that you manage?

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-0132148238

2nd edition

Authors: Berk, DeMarzo, Harford

See More Books

Posted Date: Nov 29, 2022 01:44 AM

See More Questions

You have a portfolio with a standard deviation of 30% and an expected return of 18%. You are considering adding one of the two stocks in the table below. If after adding the stock you will have 20%...
Suppose that the Treasury bill rate is 6% rather than 2%. Assume that the expected return on the market stays at 10%. Use the betas in Table 8.2. a. Calculate the expected return from Pfizer. b. Find...
You are managing a portfolio of 100 million Canadian dollars. The yield on a one-year Canadian bond is 2% (in CAD), the yield on a one-year German bond is 0.5% (in euros) and the exchange rate at the...
Suppose that a client performs an intermixed sequence of push and pop operations on a pushdown stack. The push operations insert the integers 0 through 9 in order onto the stack; the pop operations...
Ambrose is auditing the financial statements of Mays (dated December 31, 2014). The date of the auditors report is February 17, 2015, and the audit report release date is February 20, 2015. For which...
Bond Yields Ngata Corp. issued 12-year bonds 2 years ago at a coupon rate of 9.2 percent. The bonds make semiannual payments. If these bonds currently sell for 104 percent of par value, what is the...
Why does collusion pose unique prevention and detection challenges?
(Issuance and Exercise of Stock Options) On November 1, 2009, Olympic Company adopted a stock-option plan that granted options to key executives to purchase 40,000 shares of the companys $10 par...
Determine profit from the following transaction. You purchase 55 SPI200 futures contracts at 7372 and hold them to expiry when the market settles at 7322.50. In your answer you must state your...
A solid-waste recycling plant is considering two types of storage bins using an MARR of 10% per year. (a) Use ROR evaluation to determine which should be selected. (b) Confirm the selection using the...
The mean effective pressure of a 2stroke square petrol engine is (600000+ X/3) Pa and the mechanical efficiency is 73%. The crankshaft rotates at 200rpm. The Diameter of the Piston is 200mm. Find out...
Geoff opens an account for $250,000 at Home Federal Bank. The account provides that the funds are held in trust for Isabella, Geoff's daughter, and will be passed to her upon his death. What is...
How a Company has a deferred compensation plan? Explain the company's compensation in detail. What pays $0 for 2 years and then $2,100 in Year 3. For Year 4 onward, pays $700 annually. Tax allows...
What are the general and local indicators conditions that may impact the estimated selling price at property?
What is the time reported when multiple surgical procedures are performed during a single anesthetic administration? Discuss
How a standard process describes the fundamental process elements? What are expected steps taken incorporated into any defined process .?
On January 1, 2021, Levi contributed P33,750 and Hanji contributed P56,250 to form a partnership and they agreed to share profits in the ratio of their original capital contributions. During the...
TRUE OR FALSE: 1. Banks with a significantly large share of fixed-interest rate home loans are less exposed to interest rate risks. 2. Although Australian banks are pretty big, they are not...
Margoles Publishing recently completed its IPO. The stock was offered at a price of $14 per share. On the first day of trading, the stock closed at $19 per share. a. What was the initial return on...
You run a construction firm. You have just won a contract to build a government office building. Building it will require an investment of $10 million today and $5 million in one year. The government...
Rumolt Motors has 30 million shares outstanding with a price of $15 per share. In addition, Rumolt has issued bonds with a total current market value of $150 million. Suppose Rumolts equity cost of...
Please reflect on and explain the role and usefulness of the concept of SD in relation to the protection of the environment.
Has the concept of SD achieved the balance between all three pillars: environmental protection; economic development; and social issues?
What, if any, is the normative content of the concept of SD?

Suppose that you are managing a portfolio with a standard deviation of 30% and an expected return

Question:

Expert Answer:

Answer 1 The expected rate of return on the clients complete portfolio is 1269 2 The standard deviat... View the full answer

Fundamentals of Corporate Finance

Students also viewed these accounting questions