Investing in t-bills versus a private equity fund

Reference no: EM1338195

Sarah manages a private equity fund that has an expected risk premium of 5% and an expected standard deviation of 10%. The current stated rate on T-Bills is 3%. A client Sarah has been working with for some time to win over and invest has decided to place an initial investment in the fund. She, however, is also placing part of her investment in a T-Bill money market fund. She places $100,000 in Sarah's fund and $50,000 in the T-Bill fund.

Which of the 2 investment options will carry the better sharp value, or in essence, is a better investment over time for Sarah's client's portfolio? Why?

Reference no: EM1338195

Questions Cloud

Discounted cash flows : Explain why is discounted cash flows better for making tactical decisions.

Heart of western civilization : Greece has been referred to as the heart of Western Civilization, implying that all Western society stems from the accomplishments of a handful of city states in the Mediterranean.

The assignment problem : The assignment problem constraint x31 + x32 + x33 + x34

Find the difference between a blog and a wiki : Explains what blogs are and how they could be used in a business environment. Give two examples of how a business might use blogs. What is the difference between a blog and a wiki.

Investing in t-bills versus a private equity fund : Sarah manages a private equity fund that has an expected risk premium of 5% and an expected standard deviation of 10%. Which of the 2 investment options will carry the better sharp value, or in essence, is a better investment over time for Sarah's ..

Explain intellectual property rights and patent : Explain Intellectual Property Rights and Patent and Trademarks and Copyrights and What is protected by a copyright

Corporate strategy : How a well-constructed corporate strategy create value for a firm.

Program is internet based and it is expected to boost sale : Sunnyville Inc. is in the business of selling home appliances. Sunnyville Inc. has over 50 sales agents all over the country. The management at Sunnyville Inc. has decided to implement an online sales program. The new sales program is Internet bas..

Select the leadership style : Select the leadership style or challenges associated with the situation.

User Account

All Pages