Risky portfolio with expected rate of return

Assignment Help Financial Management

Reference no: EM131860412

Assume that you manage a risky portfolio with an expected rate of return of 14% and a standard deviation of 38%. The T-bill rate is 4%. Your risky portfolio includes the following investments in the given proportions: Stock A 22 % Stock B 31 % Stock C 47 % Your client decides to invest in your risky portfolio a proportion (y) of his total investment budget with the remainder in a T-bill money market fund so that his overall portfolio will have an expected rate of return of 10%. a. What is the proportion y? (Round your answer to 2 decimal places.) Proportion y b. What are your client's investment proportions in your three stocks and the T-bill fund? (Round your intermediate calculations and final answers to 2 decimal places.) Security Investment Proportions T-Bills % Stock A % Stock B % Stock C % c. What is the standard deviation of the rate of return on your client's portfolio? (Round your intermediate calculations and final answer to 2 decimal places.) Standard deviation % per year.

Reference no: EM131860412

Questions Cloud

How does the intervention fit within a model of addiction : For this assignment, consider one of the optional articles listed for this unit, or locate a peer-reviewed journal article in the Capella library.

State the null and the alternative hypothesis of the test : Generate the contingency table between "Level of Education" and "Department". Are the requirements for performing the Chi-square test

Create a topic for an upcoming meeting that would appeal : Create a topic for an upcoming meeting that would appeal to your target audience. Potential advantages of membership in the organization.

Discuss the idea of internal versus external attributions : Imagine the following situation: you are driving along a local highway when your car has a flat tire. It is ten miles to the next exit, so you pull to the side.

Risky portfolio with expected rate of return : Assume that you manage a risky portfolio with an expected rate of return of 14% and a standard deviation of 38%. What is the proportion y?

What is the cost per serving of shrimp in the finished item : 1) What is the cost per serving of shrimp in the finished item?

Develop a ppt about the risk management element : You will develop a 20-25 slide PowerPoint presentation to expand in further detail upon the risk management element you chose in Topic 3.

The event of company becoming bankrupt : Because shareholders are the last to receive any distribution of assets in the event of a company becoming bankrupt,

Present your persuasive essay to a target audience : Present your persuasive essay to a target audience. In this assignment, you will be taking the key points from your persuasive essay and integrating them.

User Account

All Pages