Risk-free asset and the market portfolio has expected return

Assignment Help Financial Management

Reference no: EM131495922

Assume that the CAPM holds A Portfolio P that combines the risk-free asset and the market portfolio has an expected return of 14% and a return standard deviation of 18%. the risk-free rate is 5%, and the expected return on the market portfolio is 17%. Consider a security Z What expected rate of return would you expect Z to earn if it had a 0 40 correlation with the market portfolio and a standard deviation of 36%? Comment on the market risk associated with security Z.

Reference no: EM131495922

Questions Cloud

South carolina primary health care association : Assume that your selected agency (South Carolina Primary Health Care Association) received funding to expand its current emergency plan

What would be the investment proportion into risky portfolio : What would be the investment proportion into Risky Portfolio and Risk Free security to achieve return of 10%?

Best practices in manufacturing : Evaluate and compare the effectiveness of computer-maker Dell's just-in-time process and Toyota's lean manufacturing practice in terms of manufacturing.

Find the height of the trapezoid : A trapezoid has an area of 20 cm2 and a height z cm. The lengths of the parallel sides are (2z + 3) cm and (6z - 1) cm. Find the height, z, of the trapezoid

Risk-free asset and the market portfolio has expected return : Assume that the CAPM holds A Portfolio P that combines the risk-free asset and the market portfolio has an expected return of 14%

Subject-organisation behaviour : Microsoft MD Pfungwa Nandi uses an African saying to explain the importance of motivating staff. "The thumb is useless without the fingers to make it strong."

Discuss substantive ways : Discuss substantive ways in which armed conflict can contribute to or distract a developing economy and infrastructure.

What is the value of the yen in fijian dollars : A Japanese yen is worth $.0080, and a Fijian dollar (F$) is worth $.5900. What is the value of the yen in Fijian dollars

Discuss the varying degree of ethics found in organizations : Discuss the varying degree of ethics found in organizations you have worked for and how these cultures affected you and / or your work

User Account

All Pages