User Account

All Pages

What is the slope of the capital allocation line

Assignment Help Finance Basics
Reference no: EM132694658

Suppose there are only two tradable assets: S&P 500 and a T-Bill. The S&P 500 index has an expected return of 15% and a standard deviation of returns of 25%. The risk-free rate is 3%.

a) What is the slope of the Capital Allocation Line (CAL)? (this is equal to the Sharpe Ratio of your MVE)

b) What is the composition of a portfolio on the Capital Allocation Line that has an expected return of 20%? What is the standard deviation of this portfolio?

Reference no: EM132694658

Questions Cloud

What is the amount of the gross profit : During the current year, merchandise is sold for $315,800 cash and $1,225,000 on account. What is the amount of the gross profit
Qualitative data collection : Generally we think of qualitative data sources as observations and interviews. We tend to believe that we will interview or observe specific individuals.
Pass the necessary entries on june : On 1 July 2016 Liala Ltd sold an item, Pass the necessary entries on 30 June 2017 and 30 June 2018 to eliminate the intra-group transfer of equipment.
What accounts would be debited and credited : What accounts would be debited and credited to record the adjustment for the inventory shrinkage at the end of the accounting period
What is the slope of the capital allocation line : Suppose there are only two tradable assets: S&P 500 and a T-Bill. The S&P 500 index has an expected return of 15% and a standard deviation of returns of 25%
How can average nurses be involved in the political process : Engaging in a political process enables a nurse leader to influence others in order to achieve a set of professional goals. During the COVID-19 pandemic.
What are interest and principal portions in second payment : What are the interest and principal portions in the second payment? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Journalize adjusting entries for estimated customer refunds : May 16. Received cash on account from sale of May 6 to C. F. Howell Co. Journalize the adjusting entries for estimated customer refunds and returns
What is the expected return of a stock : Suppose the market portfolio has an expected return of 10% and a standard deviation of returns of 25%. The risk-free rate is 5%. Assume that the CAPM holds.

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