Question: U SH 10) Question Help Related to Checkpoint 8.1) (Computing the portfolio expected rate of return) Penny Francis inherited a $200,000 portfolio of investments from
U SH 10) Question Help Related to Checkpoint 8.1) (Computing the portfolio expected rate of return) Penny Francis inherited a $200,000 portfolio of investments from her grandparents when she turned 21 years of age. The portfolio is comprised of Treasury bills and stock in Ford (F) and Harley Davidson (HG): a. Based on the current portfolio composition and the expected rates of return, what is the expected rate of return for Penny's portfolio? b. Penny wants to increase her expected portfolio rate of return, she can increase the allocated weight of the portfolio she has invested in stock (Ford and Harley Davidson) and decrease her holdings of Treasury bills. If Penny moves all her money out of Treasury bills and splits it evenly between the two stocks, what will be her expected rate of retum? c. If Penny does move money out of Treasury bils and into the two stocks, she will reap a higher expected portfolio return, so why would anyone want to hold Treasury bills in their portfolio? a. Based on the current portfolio composition and the given expected rates of rolum, the expected rate of return for Penny's portfolio is places) % (Round to two decimal would anyone wa Data Table ois %. (Round $ Value Treasury bills Ford (F) Harley Davidson (HOG) Expected Return 4.8% 6.1% 12.7% 90,000 60,000 50,000 Print Done
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