What is reward-to-volatility ratio of best feasible cal

Assignment Help Financial Management

Reference no: EM131300160

A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 4.5%. The probability distributions of the risky funds are:

Expected Return Standard Deviation

Stock fund (S) 15% 35%

Bond fund (B) 6% 29%

The correlation between the fund returns is .0517.

What is the reward-to-volatility ratio of the best feasible CAL? (Do not round intermediate calculations. Round your answer to 4 decimal places.)

Reward-to-volatility ratio

Reference no: EM131300160

Questions Cloud

Discuss how frequently business plan should be updated : Discuss how frequently a business plan should be updated. What elements of the business plan will be required to be updated with current year-to-date information and data?

Annual deposits into the savings account starting today : A retirement home in Florida costs $200,000 today. Housing prices in Florida are increasing at a rate of 4% per year. Joe wants to buy the home in 8 years when he retires. Joe has $25,000 right now in a savings account paying 8% interest per year. Jo..

What is expected return of your portfolio : You have no assets other than your investments in XYZ and PDQ stock. What is the expected return of your portfolio? Show all work.

Should redesign change its strategy : Redesign Corp. is considering a new strategy that would increase its expected return from 12% to 13.9%, but would also increase its beta from 1.2 to 1.8. The risk-free rate is 5% and the return on the market is expected to be 10%. Should Redesign cha..

What is reward-to-volatility ratio of best feasible cal : A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 4.5%. What is the reward-to-vola..

What are its times-interest-earned ratio : The W.C. Pruett Corp. has $600,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 7%. In addition, it has $600,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preffere..

Details about inventory and property-plant and equipment : What item is not included in the notes to the financial statements? Details about inventory and property, plant and equipment.

About the planning for retirement : Planning for Retirement Tom and Tricia are 22, newly married, and ready to embark on the journey of life. They both plan to retire 45 years from today. Because their budget seems tight right now, they had been thinking that they would wait at least 1..

Analyzing accounts receivable-allowance for doubtful account : Which of the following items would not be considered when analyzing accounts receivable and allowance for doubtful accounts?

User Account

All Pages