Reference no: EM131149996
1. 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 4.8%. The probability distributions of the risky funds are:
Expected Return Standard Deviation
Stock fund (S) 18% 38%
Bond fund (B) 9% 32%
The correlation between the fund returns is 1313.
What is the Reward to volatility Ratio of the best feasible CAL?
2. 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 5.9%. The probability distributions of the risky funds are:
|
Expected Return Standard Deviation
|
Stock fund (S) 20% 49%
Bond fund (B) 9% 43%
The correlation between the fund returns is 0721.
Suppose now that your portfolio must yield an expected return of 18% and be efficient, that is, on the best feasible CAL.
a. What is the standard deviation of your portfolio?
b-1 What is the proportion invested in the T-bill fund?
b-2 What is the proportion invested in each of the two risky funds?
3. Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, rf. The characteristics of two of the stocks are as follows:
|
Stock Expected Return Standard Deviation
|
A 5% 45%
B 10% 55%
Correlation = -1
a. Calculate the expected rate of return on this risk-free portfolio? (Hint: Can a particular stock portfolio be substituted for the risk-free asset?)
b. Could the equilibrium rf be greater than 7.25%?
a. Yes
b. No
4. A project has a 0.64 chance of doubling your investment in a year and a 0.36 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment?
5. Investors expect the market rate of return this year to be 12.50%. The expected rate of return on a stock with a beta of 0.9 is currently 11.25%. If the market return this year turns out to be 9.70%, how would you revise your expectation of the rate of return on the stock?
|
Why the skills and training of project managers
: Speculate on the main reasons why the skills and training of project managers have changed over time. Give your opinion as to whether these changes have been good for business. Provide a rationale for your response
|
|
What pertinent aspects of us law
: What pertinent aspects of U.S. law should the company be aware of in its goal to do business internationally? Assess the legal implications of moving business abroad specific to your chosen country. What are the advantages and disadvantages
|
|
Measure the velocity distribution in a water tunnel at 20°c
: Your job is to select an appropriate U-tube from a manufacturer that supplies manometers of heights 8, 12, 16, 24, and 36 in. The cost increases significantly with manometer height. Which of these should you purchase?
|
|
Description of the communicable disease
: Description of the communicable disease (causes, symptoms, mode of transmission, complications, treatment) and the demographic of interest (mortality, morbidity, incidence, and prevalence). Describe the determinants of health and explain how those..
|
|
What is the reward to volatility ratio
: What is the Reward to volatility Ratio of the best feasible CAL? - What is the standard deviation of your portfolio? -What is the proportion invested in the T-bill fund?
|
|
Run a pipe to the nearest water supply
: You require a minimum of 3.0 gal/min of water when the end of your pipe is open to the atmosphere. To minimize cost, you want to buy the smallest-diameter pipe possible. The pipe you will use is extremely smooth. (a) Find the total head loss from
|
|
Analyze the integration of risk management
: Analyze the integration of risk management as a component into the total project management approach. Appropriately use relevant and effective communication techniques
|
|
Where you are now in the developmental process
: Make sure to use what you have learned in class as a lens for writing this paper. I want to know that you understand how your own life fits into the stages of development you have learned about. That means I want to see references to the theoris..
|
|
What is the issue with spanning tree protocol as discussed
: What is the issue with spanning tree protocol as discussed by the presenter and how would you deal with the issues identified?
|