The risky asset to form portfolio with expected return

Assignment Help Financial Management

Reference no: EM132033993

1. Suppose you have a portfolio that is 70% in the risk-free asset and 30% in a stock. The stock has a standard deviation of 0.30 (i.e., 30%). What is the standard deviation of the portfolio?

A. 0.30 (i.e., 30%)

B. 0.09 (i.e., 9%)

C. 0.21 (i.e., 21%)

D. 0

2. You have a total of $100,000 to invest in a portfolio of assets. The portfolio is composed of a risky asset with an expected rate of return of 15% and a standard deviation of 21% and a Treasury bill with a rate of return of 5%. How much money should be invested in the risky asset to form a portfolio with an expected return of 11%?

A. $60,000

B. $40,000

C. $70,000

D. $30,000

3. Consider the CAPM. The risk-free rate is 4%, and the expected return on the market is 18%. What is the expected return on a stock with a beta of 1.2?

A. 6%

B. 15.6%

C. 18%

D. 20.8%

Reference no: EM132033993

Questions Cloud

What is the project discounted payback : What is the project's discounted payback?

Approximately price call option on foreign currency : Use the Garman – Hohlhagen equations to approximately price a call option on a foreign currency,

The payoff from european style look-back put option : The payoff from a European style Look-back put option is:

Should blueberry undertake this investment project : (Country Risk and Capital Investment) Blueberry Farm Inc. (U.S. firm) is planning a project in Japan. Should Blueberry undertake this investment project?

The risky asset to form portfolio with expected return : How much money should be invested in the risky asset to form a portfolio with an expected return of 11%?

What is initial investment outlay for spectrometer : What is the initial investment outlay for the spectrometer, that is, what is the Year 0 project cash flow?

Outlay for machine for capital budgeting purposes : What is the initial investment outlay for the machine for capital budgeting purposes, that is, what is the Year 0 project cash flow?

Charlene is evaluating capital budgeting project : DEPRECIATION METHODS Charlene is evaluating a capital budgeting project that should last for 4 years.

The efficient market hypothesis implies that : The efficient market hypothesis implies that

User Account

All Pages