Proportion of stocks in investor

Assignment Help Finance Basics
Reference no: EM132255624

Suppose the optimal risky portfolio consists of 0.62 stocks and the rest are in bonds. It has an expected return of 0.11 and standard deviation of 0.27. If an investor has a risk-aversion of 7, then what is the proportion of stocks in this investor's optimal complete portfolio? Assume that the risk-free rate is 0.02.

Reference no: EM132255624

Questions Cloud

Next dividend is in one month : What would be the price of one shares of its stock if the next dividend is in one month, not three months?
Complete a loan servicing calculation : FNS40815 - Certificate IV in Finance and Mortgage Broking - The National Finance Institute - how to complete the NSR form. A Lenders Mortgage Insurance Chart
What is the average level of inventory at single store : What is the average level of inventory at a single store? Across the chain? What other benefits will the company obtain from increasing the order frequency?
Develop a branding strategy for your product : Describe or list the feedback you received on Part A of your marketing plan. Explain how you will use the feedback to improve your plan.
Proportion of stocks in investor : What is the proportion of stocks in this investor's optimal complete portfolio? Assume that the risk-free rate is 0.02.
What the authors mean by a blue ocean strategy : Summarize what the authors mean by a Blue Ocean Strategy and how it differs from how most companies operate. How a couple of organizations they've studied.
Determining the portfolio return : Explain the role of weights in determining the portfolio return
Define promotion-advertising and publicity : Define promotion, advertising and publicity. Explain why a business should focus on its brand.
Prepare a projected balance sheet representing the end : Prepare a projected balance sheet representing the end of the first calendar year of operations and defining assets and liabilities.

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the value of each share in the firm

You own one share in a company called Invest Co. Inc. Examining the balance sheet, you have determined that the firm has $100,000 cash, equipment worth $900,000, and 100,000 shares outstanding.

  What is samsung unlevered beta

Samsung Inc has a beta of 1.35. The tax rate is 40%, and Samsung is financed with 30% debt. What is Samsung's unlevered beta?

  Macrs allowance percentages

ABC Company purchased a new machinery 4 years ago for $55,213. Today, it is selling this equipment for $28,655. What is the after-tax salvage value if the tax rate is 34 percent?

  List the elements of each of the following sample spaces

1. List the elements of each of the following sample spaces:

  Construct a graph of this utility function

Consider a person with the following utility function over wealth: u(w)=ew, where e is the exponential function (approximately equal to 2.7183).

  Pick out the projects that the firm should accept

The Suboptimal Glass Company uses a process of capital rationing in its decision making. The firm's cost of capital is 13 percent.

  What is the correctly valued offer price

The current market value of Tanus Corporation's equity is $90 million. The company has 25 million outstanding shares and will issue 5 million new shares.

  Find the compound amount and the compound interest

Find the compound amount and the compound interest if $10,000 is invested for 5 years at 12% interest compounded monthly.

  Balance for net operating working capital

At the end of the year, gross fixed assets was $1,821 million. Duffy's free cash flow for the year was $417 million. Calculate the end-of-year balance for net.

  Discuss about the expected dividend yield

If Company X's stock is expected to pay a dividend of $1.25 during the next 12 months, growth rate of dividends is constant at 4.7%, and X's current price.

  What is the gross output of the manufacturing activity

Based on data in the manufacturing activity column in the U.S 3x3 SAM.

  Information about forward contract

Assume that your company will be receiving 30 million euros six months from now and the euro is currently selling for 1 euro per dollar.

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