User Account

All Pages

Review problem related to the riskless asset

Assignment Help Finance Basics
Reference no: EM131682920

Question: Every investor in the capital asset pricing model owns a combination of the market portfolio and a riskless asset. Assume that the standard deviation of the market portfolio is 30%, and that the expected return on the portfolio is 15%. What proportion of the following investor's wealth would you suggest investing in the market portfolio and what proportion in the riskless asset? (The riskless asset has an expected return of 5%)

a. an investor who desires a portfolio with no standard deviation

b. an investor who desires a portfolio with a standard deviation of 15%

c. an investor who desires a portfolio with a standard deviation of 30%

d. an investor who desires a portfolio with a standard deviation of 45%

e. an investor who desires a portfolio with an expected return of 12%

Reference no: EM131682920

Questions Cloud

How do you find the volume of rainfall over an area : How do you find the volume of rainfall over an area of 92km2 given that a tipping bucket rain gauge
Operations of the company business : Mary continues to live in the house and is not involved in the day to day operations of the company's business.
How was he or she able to cope with these challenges : What were the obstacles to assimilation faced by the author of the account? How was he or she able to cope with these challenges?
Discuss australia blow clockwise or counter clockwise : Why is it that the west coast of the United States never has problems with tropical cyclones, while tropical cyclones annually cause significant destruction
Review problem related to the riskless asset : Every investor in the capital asset pricing model owns a combination of the market portfolio and a riskless asset. Assume that the standard deviation.
Adjusted over the duration of the product life cycle : Why is that strategy the best choice and will it need to be adjusted over the duration of the Product Life Cycle (PLC)?
Discuss genetically modified foods to be cultivated : What are some of the potential risks and benefits to allowing genetically modified foods to be cultivated and available to consumers
Analyze the case about harley-davidson : Analyze whether or not Harley-Davidson has a source of sustainable competitive advantage.
What are incentives that might encourage more people to vote : What are some other incentives that might encourage more people to vote? If the United States had such a policy do you think, as William Galston does.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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