User Account

All Pages

What alternative investment has the lowest possible volatili

Assignment Help Finance Basics
Reference no: EM131142042

Your portfolio investment consists of $15,000 invested in only one stock – Microsoft. Suppose the risk-free rate is 5%. Microsoft stock has an expected return of 12% and a volatility of 40%, and the market portfolio has an expected return of 10%, and a volatility of 18%. Under CAPM assumptions:

(a) What alternative investment has the lowest possible volatility while having the same expected return as Microsoft?

(b)What investment has the highest possible expected return while having the same volatility of Microsoft?

Reference no: EM131142042

Questions Cloud

What will happen to the inflation rate : If current output is below potential GDP, what will happen to the inflation rate? How does inflation adjustment move the economy back to full employment?
Inductance of each conductor due to internal flux linkages : Calculate in mH/km (a) the inductance of each conductor due to internal flux linkages only, (b) the inductance of each conductor due to both internal and external flux linkages, and (c) the total inductance of the line.
Calculate the positive-sequence inductance : A 60-Hz three-phase, three-wire overhead line has solid cylindrical conductors arranged in the form of an equilateral triangle with 4 ft conductor spacing. Conductor diameter is 0.5 in.
How is the marginal propensity to consume affected : How is the marginal propensity to consume affected? How is the multiplier affected?
What alternative investment has the lowest possible volatili : (a) What alternative investment has the lowest possible volatility while having the same expected return as Microsoft? (b)What investment has the highest possible expected return while having the same volatility of Microsoft?
Find the inductive reactance per mile : Find the inductive reactance per mile of a single-phase overhead transmission line operating at 60 Hz, given the conductors to be Partridge and the spacing between centers to be 20 ft.
What motivation typically cause firms to initiate facilities : What motivations typically cause firms to initiate a facilities location or relocation projects? How would a facility location decision for our company differ from one for a service organization?
What is the best measure of the central tendency : What is the BEST measure of the central tendency for the following set of numbers: Which of the following is/are measure(s) of variability? (select all that apply)?
What is the equilibrium output : What determines the slope of the aggregate expenditures schedule? What is the equilibrium output?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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