Portfolios-market portfolio and the risk-free asset

Assignment Help Financial Management
Reference no: EM131087704

Consider the following information concerning three portfolios, the market portfolio, and the risk-free asset: Portfolio RP σP βP X 14.00 % 20.00 % 1.80 Y 13.00 15.00 1.30 Z 9.20 5.00 .85 Market 11.10 10.00 1.00 Risk-free 6.60 .00 .00 Assume that the tracking error of Portfolio X is 10.60 percent. What is the information ratio for Portfolio X?

Reference no: EM131087704

Questions Cloud

Issue new stock to finance its capital budget : Assume that you are on the financial staff of Vanderheiden Inc., and you have collected the following data: The yield on the company's outstanding bonds is 7.75%, its tax rate is 40%, What is the firm's WACC, assuming it must issue new stock to finan..
European call futures option when the futures price : Calculate the value of a 6-month European call futures option when the futures price is $21, the strike price is $20, the risk-free rate is 12% per annum and the volatility of the futures price is 20% per annum.
Find the exercise price of the index put option : You want to hedge against your portfolio value declining more than 10% in 1 year. Currently, the S&P500 is standing at 2,000 and your portfolio has a beta of 1.6. You need to purchase 1-yr S&P500 put options. Find the exercise price of the index put ..
What is the minimum weight of the middle : The weight of items produced by a machine is normally distributed with a mean of 8 ounces and a standard deviation of 2 ounces. Refer to Exhibit 6-5. What is the minimum weight of the middle 95% of the items?
Portfolios-market portfolio and the risk-free asset : Consider the following information concerning three portfolios, the market portfolio, and the risk-free asset: Portfolio RP σP βP X 14.00 % 20.00 % 1.80 Y 13.00 15.00 1.30 Z 9.20 5.00 .85 Market 11.10 10.00 1.00 Risk-free 6.60 .00 .00 Assume that the..
What are the reward-to-risk ratios : Stock Y has a beta of .80 and an expected return of 16.05 percent. Stock Z has a beta of .90 and an expected return of 8 percent. If the risk-free rate is 3.0 percent and the market risk premium is 10.8 percent, what are the reward-to-risk ratios of ..
What percentage of the total votes does she control : Betsy Ross owns 927 shares in the Hanson Fabrics Company. There are 15 directors to be elected. 33,500 shares are outstanding. The firm has adopted cumulative voting. How many total votes can be cast? What percentage of the total votes does she contr..
What is expected return on the market-risk-free rate : Suppose you observe the following situation: Security Beta. peat co=1.200 Expected Return =12 ., Re-Peat Co. Beta = .75 and Expected return=10.5 .Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the mark..
Portion of the issue by buying securities in open market : Nanotech, Inc., has a bond issue maturing in seven years that is paying a coupon rate of 9.5 percent (semiannual payments). Management wants to retire a portion of the issue by buying the securities in the open market. If it can refinance at 8.0 perc..

Reviews

Write a Review

Financial Management Questions & Answers

  Declare the implicit interest for tax purposes

PomPom Co. recently issued a $1,000 face, 20 year zero coupon bond. The initial offering sold in January, 2000 for $350. Despite the fact that the bond doesn’t pay interest, the IRS says you must declare the implicit interest for tax purposes. What i..

  Equipment is depreciated straight-line to zero book value

Thornley Machines is considering a 3-year project with an initial cost of $660,000. The project will not directly produce any sales but will reduce operating costs by $400,000 a year. The equipment is depreciated straight-line to a zero book value ov..

  Future value notations denotes the value as of period

Which of the following future value notations denotes the value as of period 11 of a cash flow received in period 2?

  How would the apr of the credit union loan change

Because of a job change, Bob has just relocated to the southeastern United States. He sold his furniture before he moved, so he’s now shopping for new furnishings. Determine the APR for both loans. How would the APR of the Credit Union loan change, i..

  Some financial experts believe short-term liabilities s

Some financial experts believe short-term liabilities should be included in the current ratio and others believe it shouldn't. Choose a side and make an argument as to why you chose that side

  Which the two systems will break even

A certain area can be irrigated by piping water from a nearby river. Two competing installations are being considered, for which the following engineering and cost data apply : On the basis of a 10-year life with an interest rate of 12%, determine th..

  An underwritten offering or best-efforts offering

Which do you think is more risky for a firm trying to raise capital - an underwritten offering or a best-efforts offering?

  A discount factor

A discount factor:

  Concepts of business risk and financial risk

Explain the concepts of business risk and financial risk. Identify factors that affect each. Explain the concept of financial leverage. Identify advantages and disadvantages of using financial leverage within a company.

  Research utilization processes in program evaluation

Research utilization processes in program evaluation. Critique at least two and explain how you would convince stakeholders to best utilize your evaluation.

  What is the current value of cars equity and debt

CAR Inc. will be liquidated in one year. The value of CAR’s assets is currently $650 million, and next year it will be either $825 million or $400 million. Before shareholders can be paid next year, CAR will have to repay $500 million of debt. What i..

  What would be the total return if the required margin

A stock sells for $20 per share and you purchase 100 shares. If the value of stock doubles to $40 in 1 year what would be the total return? What would be the total return if the required margin where: a. Required margin 75%? b. Required margin 50%? c..

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!

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