Find the optimal risky portfolio

Assignment Help Financial Management

Reference no: EM131909726

There are only three investments available:

1) Stock Fund A, Expected Return = 20%, Standard Deviation = 30%;

2) Stock Fund B, Expected Return = 30%, Standard Deviation = 60%;

3) T-bills, Expected Return = 5%. Note that the correlation coefficient between funds A and B is .1.

A) Find the optimal risky portfolio and its expected return and standard deviation.

B) Find the slope of the CAL supported by T-bills and the optimal portfolio.

C) What percentage of their assets will an investor with A=5 invest in Funds A and B? What percentage will they invest in T-bills?

D) What percentage of their TOTAL ASSETS will the investor in part C have invested in Fund A?

Reference no: EM131909726

Questions Cloud

Isolation of japan during the tokugawa period : Discuss the isolation of Japan during the Tokugawa period, the causes of the isolation and the effect it has on both the economy and society.

Theories regarding the social construction : There are many theories regarding the social construction of serial killers. Discuss the difference in social structure, social class, social process

What amount can arun deduct as an itemized deduction : Victor, a calendar year taxpayer, owns 100 shares of AB Corporation stock, which was purchased three years ago for $5,000.

What are some effective writing techniques : 1. What are some effective writing techniques? 2. What are some ineffective writing techniques?

Find the optimal risky portfolio : Find the optimal risky portfolio and its expected return and standard deviation. Find the slope of the CAL supported by T-bills and the optimal portfolio.

What is the estimated required rate of return : What is the estimated required rate of return on Woidtke's stock? What stock price is expected 1 year from now?

Discuss how you can apply at least four of the weekly course : Discuss how you can apply at least four of the weekly course learning outcomes throughout this course to your professional or personal life.

Use of nonverbal cues : The use of nonverbal cues is affected by variables such as gender, personalities and culture like some of you mentioned.

How much do you need to deposit on a monthly basis : If you can earn 12% per year, how much do you need to deposit on a monthly basis if the first payment is made in one month?

User Account

All Pages