User Account

All Pages

Passive market index portfolio

Assignment Help Finance Basics
Reference no: EM133122760

A small stock that you are following has an alpha = 8% and a standard deviation of its regression residuals of 15.75%. The Sharpe ratio of the market index portfolio M is 0.33. According to the Treynor-Black Model, by how much could this active investor improve his/her Sharpe ratio relative to investing only in the passive market index portfolio M? Note that the Sharpe Ratio is shown as a number rather than a percentage. Enter your answer rounded to four decimal places. For example, if your answer is 12.345% or 0.12345 then enter as .1235 in the answer box.

Reference no: EM133122760

Questions Cloud

What is the expected bond value : The real rates are 1.5% per year every year. The expected inflation rate is 7% in the first year, 5% in the second year, and 4% in the third year. A Treasury bo
What is the return on equity : Leo's Markets has sales of $684,000, costs of $437,000, interest paid of $13,800, total assets of $712,000, and depreciation of $109,400. The tax rate is 21 per
Reward to volatility ratio for the equity fund : You manage an equity fund with an expected risk premium of 10% and a standard deviation of 14%. The rate of Treasury bills is 6%.
What is the maximum price unik would be willing : a. What is the maximum price UNIK should be willing to pay for the assembly line?
Passive market index portfolio : A small stock that you are following has an alpha = 8% and a standard deviation of its regression residuals of 15.75%. The Sharpe ratio of the market index port
Create a decision table in excel : Scenario: You are a business owner faced with an important decision that could potentially be very lucrative. Keep in mind the "Six Steps in Decision Making" as
What is the problem and objective of decision : Scenario: You are a business owner faced with an important decision that could potentially be very lucrative. Keep in mind the "Six Steps in Decision Making" as
What is the problem and objective of decision : Scenario: You are a business owner faced with an important decision that could potentially be very lucrative. Keep in mind the "Six Steps in Decision Making" as
Preventing financial stress and potential failure : As people often say, "Cash is king!" Cash flow is an important indicator of a company's financial health and a value driver. Effective cash flow management enab

Reviews

Write a Review

Finance Basics Questions & Answers

  Semiannual interest rate payment

What will Worldwide Widget Manufacturing have to make as a semiannual interest rate payment?

  What is the expected return on a stock

The total expected return on the entire stock market is 8 percent and U.S. Treasuries are yielding 3.2 percent. What is the expected return on a stock.

  How you make decision if you were callaway management

Is this enough evidence to persuade Callaway to enter the golf ball market?- How would you make the decision if you were Callaway management? Would you use hypothesis testing?

  Advice the treasure on which of the two methods

Advice the treasure on which of the two methods is the most financially advantages for regent ltd.

  What is the expected interest income from the loan each year

To hedge against rates falling, the banker buys a 30-day interest-rate floor with a floor rate of 7.5% on a notional amount of $10,000,000. After 30 days, actual rates fall to 7.2%. What is the expected interest income from the loan each year? How mu..

  Unique price for a futures contract

Problem: How we can get a fair unique price for a futures contract?

  What types of assets are defined as cash in accounting

Many people think of cash as coins and notes. In accounting cash has a broader meaning. What types of assets are defined as cash in accounting?

  What will the account balance be after 17 ?years

Suppose that when your friend was? born, your? friend's parents deposit $5000 in an account paying 5.9?% interest compounded quarterly.

  Proposed nuclear power plant

A proposed nuclear power plant will cost $2.9 billion to build and then will produce cash flows of $370 million a year for 15 years. After that period (in year 15), it must be decommissioned at a cost of $970 million.

  What are the primary motives for corporate restructuring

What are the primary motives for corporate restructuring? Give examples. When is such financing used and what type of firm is most apt to use such financing?

  What is the balance of recievables at the end of june

February sales were $60,000 and March sales were $70,000. In the past bad debt percentage has been 0 and is expected to continue.

  Explain what is counted in this years gdp

You bought a new Wii at GameStop last year and resold it on eBay this year.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd