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Assume that you manage a risky portfolio with an expected rate of return of 14% and a standard deviation of 38%. The T-bill rate is 4%. Your risky portfolio includes the following investments in the given proportions: Stock A 22 % Stock B 31 % Stock C 47 % Your client decides to invest in your risky portfolio a proportion (y) of his total investment budget with the remainder in a T-bill money market fund so that his overall portfolio will have an expected rate of return of 10%.
a. What are your client's investment proportions in your three stocks and the T-bill fund? (Round your intermediate calculations and final answers to 2 decimal places.) Security Investment Proportions
T-Bills =
Stock A %=
Stock B % Stock C %=
c. What is the standard deviation of the rate of return on your client's portfolio? (Round your intermediate calculations and final answer to 2 decimal places.) Standard deviation % per year?
Drongo Corporation's 2-year bonds yield 6.81%. The real risk-free rate is 2.7%. The maturity risk premium is estimated to be 0.09%(t-1), where t is equal to the time to maturity. The default and liquidity premiums for Drongo's bonds total 1.27% and a..
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Numerous corporate scandals occurred in the decade leading up to the financial crisis that began in 2007 and lasted into 2009.
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Each was 22 years old and began working in their chosen career path. The both realize that it’s important to save for retirement.
A non-dividend-paying stock is currently priced at $46.57. The risk-free rate is 5.6 percent, and a futures contract on the stock matures in five months. What price should the futures be?
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