You hold a portfolio that yields an expected rate of return of 18% and standard deviation of

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

Question:

You hold a portfolio that yields an expected rate of return of 18% and standard deviation of 28%. The components of the portfolio include 25% of funds in Stock A, 32% of funds in Stock B and 43% of funds in Stock C. A T-bill money market fund yields a rate of 8%. Suppose that your client decides to invest in your portfolio a proportion y of the total investment budget so that the overall portfolio will have an expected rate of return of 16%

a. What is the proportion y?

b.What are your client's investment proportions in your three stocks and the T-bill fund?

c.What is the standard deviation of the rate of return on your client's portfolio?

Posted Date: May 18, 2024 11:18 PM

See More Questions

The data below provides weekly sales for the past 12 weeks (weeks 21-32). Week Sales 21 4,000 22 3,655 23 3,958 24 3,983 25 4,538 26 4,120 27 4,692 28 4,421 29 4,859 30 5,030 31 5,540 32 5,670 Use a...
Draw the full structure of the DNA dinucleotide AG.
Insomniacs Coffee Ltd., a mobile coffee company, had the following account balances at the end of December 2020: Cash...
Should family members serve on the same board?
Murphy Delivery Service has completed closing entries and the accounting cycle for 2018. The business is now ready to record January 2019 transactions. Jan. 3 Collected $200 cash from customer on...
Assume a firm had a 2019 EBIT of $80,000, depreciation & amortization of $50,000, a 30% tax rate, capital expenditures of $60,000 in 2019, and net working capital increased by $20,000 in 2019.What is...
Regina Harrison is a partner in Pressed for Time. An analysis of Regina Harrison's capital account indicates that during the most recent year, she withdrew $20,000 from the partnership. Her share of...
What is the significance of distinguishing between expenses related to inventory and direct inventory costs in accounting, and how does this impact financial reporting and accuracy?
1. A machine is purchased on 1 April 2 0 2 0 at a cost of R 1 0 0 0 . For the year ending 3 1 March 2 0 2 1 , the depreciation expense amcurst to 8 2 0 0 and tax allowwances amount to ???? 3 0 0 ....
The Bears have bank accounts, investments totalling $35,000 and personal property equaling $45,000. Currently, Klawz Bear has educational loans of $12,000. Their salaries total $55,000 and their...
Consider a renewal process with mean interarrival time . Suppose that each event of this process is independently "counted" with probability p. Let Nc (t) denote the number of counted events by time...
Federal facilities associated with an international port of entry at Tornillo, TX are expected to cost dollar 5 4 million. A six - lane, 1 2 7 4 - foot - long bridge is expected to cost dollar 1 4...
Using marketing communication, how could you help Nestl to overcome imagery problem of Nescaf coffee?
What is removed during each of the three stages of wastewater treatment: primary, secondary, and tertiary? During which state would you expect items to be recovered that were accidentally flushed,...
The following are selected operating data for Jack- son Company's Blending Department for November 2019. Painting and packaging operations are carried out subsequently in other departments. Calculate...
In its first month of operations (May of 2019), Allred Company's Department 1 incurred charges of $$72,000$ for direct materials (9,000 units), $$38,700$ for direct labor, and $$13,500$ for...
The following data (and annotations) for March 2019 are for the work-in-process account of the first of Olympus Company's four departments used in manufacturing its only product. Assuming that...

You hold a portfolio that yields an expected rate of return of 18% and standard deviation of

Question:

Expert Answer:

Students also viewed these finance questions