Weights of the risk-free asset and the sp

Assignment Help Finance Basics
Reference no: EM133122555

Assume that the risk-free rate is 2 per cent and the expected return on the S&P 500 index is 15 per cent. The standard deviation of the market index is 25 per cent. You are managing the pension fund of your company and would like to achieve an expected return of 12.40 per cent. What should be the weights of the risk-free asset and the S&P 500 to achieve this expected return?

Reference no: EM133122555

Questions Cloud

What is the market value of assets for this company : Balance Sheet in book values: Assets 1500, Total debt 900 and Liabilities 1150. What is the market value of assets for this company
Obtain quotes on goods or service : Describe a situation where you would advise an organisation to use a tender process to obtain quotes on goods or service.
Literature review of related academic work : Write a report in the form of an academic research paper - Do teenagers prefer different hardware depending on whether they are male or female
What is the income to the nc interest : In 2022 Little reported earnings of $50,000 and paid dividends of $10,000. What is the "Income to the NC Interest" in 2022
Weights of the risk-free asset and the sp : Assume that the risk-free rate is 2 per cent and the expected return on the S&P 500 index is 15 per cent. The standard deviation of the market index is 25 per c
Calculate the expected return on the portfolio : An investor wishes to construct a portfolio by borrowing 35 percent of his original wealth and investing all the money in a stock index. The return on the risk-
What the machine book value at the end of year : The machine's useful life is estimated to be 4 years with a $9,100 salvage value. What the machine's book value at the end of year
Discuss the performance of that currency against the usd : 1. Choose a foreign currency other than USD and discuss the performance of that currency against the USD. You must first publicly disclose your choice here befo
Determine the capital market line : The expected returns of assets A and B are 15% and 10% respectively, and their standard deviations are 5% and 2%. Assume the correlation coefficient is 1, 0, an

Reviews

Write a Review

Finance Basics Questions & Answers

  Determine the equipment after-tax salvage value

Liberty Services is now at the end of final year of a project. The equipment originally cost $22,500, of which 75 percent has been depreciated. The company can sell the used equipment today for $6,000, and its tax rate is 40 percent.

  What is the minimum initiation interval for a software

A certain loop requires 5 loads, 7 stores, and 8 arithmetic operations. What is the minimum initiation interval for a software pipelining of this loop on a machine that executes each operation in one clock tick, and has resources enough to do, in ..

  Demonstrate why the bank should give your company a loan

create a detailed PowerPoint presentation with speaker's notes to demonstrate why the bank should give your company a loan.

  Internet and social computing for business purposes

As we discuss ways to use the Internet and Social Computing for business purposes, what are some security issues we should be aware of?

  Computing the current dividend per share

Question: What is the current dividend per share? Note: Explain in detail.

  What is the maximum commitment to a/r

We expect that we can receive annual incremental income after taxes of $25,000 which includes an adjustment for uncollectible accounts. What is the maximum commitment to A/R we should be willing to assume if our firm's minimum required after-tax r..

  Recalculate the up and down moves

The current price of United Carbon (UC) stock is $200. Recalculate the up and down moves and revalue the option by using the two-period binomial method

  Calculate the value of the stock

Investors anticipate that the annual dividends will grow by 3% per year forever, and they require an 8% discount rate. Calculate the value of the stock.

  Rate of dividend growth

What price would you expect to pay for a stock with 13% required rate of return, 4% rate of dividend growth, and an annual dividend of $2.50 which will be paid tomorrow?

  Narrative on thoughts about the ethical issue

Provide a narrative on your thoughts about the ethical issue discussed in the article.

  What is the return to investors

By year-end, NAV equals $12.10. The fund paid year-end distribution of income and capital gains of $1.50. What is the return to investors?

  Financial performance of the company

How to design a balance scorecard to measure both financial and non financial performance of the company to help management of the company meet its strategies,

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd