Standard deviation on the complete portfolio

Assignment Help Financial Management

Reference no: EM13915199

The return on the risky portfolio is 15%. The risk-free rate as well as the investor's borrowing rate is 10%. The standard deviation of return on the risky portfolio is 20%. If the standard deviation on the complete portfolio is 25%, the expected return on the complete portfolio is _________.

Reference no: EM13915199

Questions Cloud

Coupon bonds making semiannual payments : Backwater Corp. has 8 percent coupon bonds making SEMIANNUAL payments with a YTM of 7.2 percent and selling at $1060. How many years for these bonds have lefts until they mature?

What is the cost of equity after recapitalization : Meyer & Co. expects its EBIT to be $89,000 every year forever. The firm can borrow at 5 percent. Meyer currently has no debt, and its cost of equity is 8 percent and the tax rate is 35 percent. The company borrows $102,000 and uses the proceeds to re..

Increase in fixed manufacturing overhead costs : Assume that Barker Company has sufficient capacity to produce 124,600 Zets each year without any increase in fixed manufacturing overhead costs. The company could increase sales by 40% above the present 89,000 units each year if it were willing to in..

Suppose the average return on asset-standard deviation : Suppose the average return on an asset is 12.1 percent and the standard deviation is 21.7 percent. Further assume that the returns are normally distributed. Use the NORMDIST function in Excel to determine the probability that in any given year you wi..

Standard deviation on the complete portfolio : The return on the risky portfolio is 15%. The risk-free rate as well as the investor's borrowing rate is 10%. The standard deviation of return on the risky portfolio is 20%. If the standard deviation on the complete portfolio is 25%, the expected ret..

Use of the difference in density between ore and impurities : The method of concentrating the ore which makes use of the difference in density between ore and impurities is called A. liquation B. leaching C. levigation D. magnetic separation

What rate of return is he expecting : ABC Co. and XYZ Co. are identical firms in all respects except for their capital structure. ABC is all equity financed with $600,000 in stock. XYZ uses both stock and perpetual debt; its stock is worth $300,000 and the interest rate on its debt is 4...

Specifically identify the shares of stock : On April 28, 2015, Sandy sold 200 shares of stock for $8,000. Sandy did not specifically identify the shares of stock sold. What is the recognized gain or loss

Indicate whether the effect requires a debit or credit entry : Identify whether each of the following transactions is an asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also explain how each event affects the accounting equation by placing a + for increase for decrease, and NA fo..

User Account

All Pages