What is sharpe measure of your resulting complete portfolio

Assignment Help Financial Management
Reference no: EM131010322

You invest $100,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 15% and a standard deviation of 30% and a treasury bill with a rate of return of 2.0%. How much money should be invested in the risky asset to form a portfolio with an expected return of 8%? Be sure to convert your percentage weight in the risky asset to dollars. What is the Sharpe measure of your resulting complete portfolio in problem 1?

Reference no: EM131010322

Questions Cloud

The expected return on equity and volatility of equity : A single 5-year zero-coupon debt issue with a maturity value of $120 and the expected return on assets of 12%. the expected return on equity, the volatility of equity
Depreciated over five years using the straight-line method : Scott Investors, Inc., is considering the purchase of a $363,000 computer with an economic life of five years. The computer will be fully depreciated over five years using the straight-line method. The market value of the computer will be $63,000 in ..
Different between risky portfolio and the risk-free asset : A portfolio has an expected rate of return of 14% and a standard deviation of 22%. The risk-free rate is 4%. An investor has the following utility function:. U = E(r)-1/2(A)σ2 Which value of A makes this investor indifferent between the risky portfol..
Experienced the same number of turns as its peer group : Dana reports Inventory of $2,596,867, Cash of $1,228,073, COGS of $8,086,302, and Accounts Receivable of $2,359,372. Its benchmark peer group turns its inventory 7.7 times a year. What would Dana's new inventory level be if it experienced the same nu..
What is sharpe measure of your resulting complete portfolio : You invest $100,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 15% and a standard deviation of 30% and a treasury bill with a rate of return of 2.0%. What is the Sharpe measure of y..
Premium bond making semiannual payments : Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 10 percent, has a YTM of 8 percent, and has 14 years to maturity. Bond Y is a discount bond making semiannual payments. The bonds have a $1,000 par value. If interest..
How long does it take to collect its credit sales : A company reports the following financial information: Inventory $197; Accounts Receivable $275; Cash $84; Prepaid expenses $398; credit sales $1,905. How long does it take to collect its credit sales?
Save money to meet three objectives-retirement income : Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with a retirement income of $32,000 per month for 20 years, with the first payment received 30 years and 1 month from now. Second,..
Calculate the expected price per share of the common stock : The total asset turnover ratio TATO (Sales/TA) of XYZ is 1.60x, its net profit margin (NI/Sales) is 8%, and its debt is half its equity (i.e. D/E ratio is 1/2). The company has $6,000,000 in assets. Calculate XYZ’s return on equity (ROE). The common ..

Reviews

Write a Review

Financial Management Questions & Answers

  Identity for a not-for-profit organization

Which of the following equations best describes the accounting identity for a not-for-profit organization?

  Standard deviation measures systematic risk

Beta measures diversifiable risk while standard deviation measures systematic risk. The CAPM estimates the required rate of return on a stock held as part of a well-diversified portfolio. Adding stocks with higher standard deviations to a portfolio w..

  The bonds make semi-annual payments

Watters Umbrella Corp. issued 20-year bonds 2 years ago at a coupon rate of 6.4 percent. The bonds make semi-annual payments. If these bonds currently sell for 110 percent of par value, what is the YTM?

  Idiosyncratic factors affecting the stock price

You run a $100M stock portfolio that has a beta of 1.50. The S&P 500 Index is currently at 1,600 and you expect the general market to be very volatile over the next six months. You are expecting to capture an alpha of 0.5% every month. The risk free ..

  What was book debt-to-value ratio-market debt-to-value ratio

In 2013 Caterpillar Inc. had about 648 million shares outstanding. Their book value was $27 per share, and the market price was $83.50 per share. The company’s balance sheet shows that the company had $25.7 billion of long-term debt, which was curren..

  Calculate time-weighted rate of return on banks portfolio

A bank buys 150 shares of a company on 1 January 2012 at a price of $156.30 per share. A dividend of $10 per share is paid on 1 January 2013. Calculate the time-weighted rate of return on bank’s portfolio.

  Calculate the firms new long-term debt added during the year

During the year, Belyk Paving Co. had sales of $2,383,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,442,000, $436,700, and $491,700, respectively.  Calculate the firm's new long-term debt added during ..

  What is the yearly return on the bond you are holding

Suppose you are holding a 5 percent coupon bond maturing in one year with a yield to maturity of 15 percent. If the interest rate on one year bonds rises from 15 percent to 20 percent over the course of the year what is the yearly return on the bond ..

  What is the expected value of the outcomes

Firm X is considering a project and its analysts have projected the following outcomes and their probabilities. 30% chance of Net Income being $4,600; 45% chance of Net Income being $7,800 and 25% chance of Net Income being $13,500. What is the expec..

  Financial statement analysis and valuation

Design a spreadsheet and prepare a set of financial statement forecasts for Walmart for Year þ1 to Year þ5 using the assumptions that follow. Project the amounts in the order presented (unless indicated otherwise) beginning with the income statement,..

  Required return does remain at maturity-find value of bond

Pecos Manufacturing has just issued a 15-year, 12% coupon interest rate, 1000-par bond that pays interest annually. Assuming that the required return does remain at 14% until maturity, find the value of the bond with (1) 15 years, (2) 12 years, (3) 9..

  What is the current value of the stock if dividends

Revarop, Inc., is a fast-growth company that is expected to grow at a rate of 23 percent for the next four years. It is then expected to grow at a constant rate of 6 percent. Revarop’s first dividend, of $4.45, will be paid in year 3. If the required..

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