Create portfolio from risky asset

Assignment Help Financial Management

Reference no: EM131972558

Mike wants to create a portfolio from a risky asset with an expected rate of return of 11.5% and a standard deviation of 21% and a Treasury bill with a rate of return of 2.5%. Mike requires an expected return of 8.75% and has $10,000 to invest. How much money should Mike invest in the risky asset?

Reference no: EM131972558

Questions Cloud

Which bond will have lower yield to maturity and why : Bond A is a municipal bond and Bond B is a investment grade corporate bond. Which bond will have lower yield to maturity (YTM) and why?

Your money should you invest in risky portfolio : If you want your complete portfolio to have a standard deviation of 7%, what percentage of your money should you invest in the risky portfolio?

Finance manager goals and primary responsibilities : What is/are the Finance manager’s goals and primary responsibilities? Describe the maneger’s conflict that is explained in the “Agency conflict”

What is the internal rate of return for proposal : What are the annual net cash flows that should be used to evaluate the opportunity? What is the internal rate of return for the proposal?

Create portfolio from risky asset : Mike wants to create a portfolio from a risky asset with an expected rate of return of 11.5%

Considering building plant for initial investment : What is the NPV of the project and should Acme wait one year? Acme Industries is considering building a plant for an initial investment of $100 million

What weight should you use to preferred stock : What weight should you use to preferred stock in the computation of OMG's WACC?

Tax law changes from the recent tax law passed : List 3 tax law changes from the recent tax law passed that will have the greatest effect on corporations and explain.

What are the certainty equivalents of the cash flows : What are the certainty equivalents of the cash flows? What is the present value using the certainty equivalent method?

User Account

All Pages