User Account

All Pages

What is the composition and standard deviation

Assignment Help Accounting Basics
Reference no: EM133010249

Question - You currently have all your funds invested in a portfolio of shares of Polycorp (PLC). The shares have an expected return of 10%pa and a standard deviation of 18%pa. You are offered the opportunity to invest in two funds managed by the Rearguard Portfolio Management Company. One is a Bond Fund that has an expected return of 4%pa and a standard deviation of 6%pa. The other fund is one that tracks the market index and has an expected return of 15%pa and a standard deviation of 20%pa. The correlation between the index fund and the bond fund is 0.3. Construct a portfolio of the Index and Bond funds that gives the same expected return as a portfolio of Polycorp shares. What is the composition and standard deviation of this portfolio? Use this example to comment on the benefits of diversification.

Reference no: EM133010249

Questions Cloud

Prepare necessary journal entries for month of December : Prepare the necessary journal entries for the month of December 2020 for the following transactions of Resistance Inc. Resistance reports under ASPE
Describe the first compensation package offered to dunlap : Describe the first compensation package offered to Dunlap. Was it well designed? What are the strengths and weaknesses of the package? What type(s) of behavior
How much pretax income does it currently take : How much pretax income does it currently take Tawana to generate the $6,000 (after-taxes) given to Jonathon
Describe the steps in the employee selection procedure : Describe the steps in the employee selection procedure, including the proper orientation of new employees.
What is the composition and standard deviation : What is the composition and standard deviation of this portfolio? Use this example to comment on the benefits of diversification
Summarize the four elements of negligence : Summarize the four elements of negligence in your own words. Be sure to identify which scenario you picked.
Determine a planning schedule for PM Computer Services : Determine a planning schedule for PM Computer Services, indicating the number of employees working each month, including the number hired
What is the average inventory if costs are minimized : How many orders per year are needed with the optimal policy and What is the average inventory if costs are minimized
Topic ethics in management : a. How does the Administrative Principles (five functions of management: Planning, Organizing, Commanding, Coordinating, and Controlling) from Henri Fayol help

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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