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

  The standard deviation of stock a is 02 and the standard

the standard deviation of stock a is 0.2 and the standard deviation of stock b 0.12. the covariance between stock a and

  Explain the relevant parts of the textbook

Said another way, you are to replicate and explain the relevant parts of the textbook, notes, and lectures associated with this question. Teach me the concept(s

  Green thumb garden centers sells 240000 bags of lawn

green thumb garden centers sells 240000 bags of lawn fertilizer annually. the optimal safety stock which is on hand

  Thatthe company plans to maintain its dividend payments

Consider the Industrial Supply Company example (Table 4.4) again. Assume thatthe company plans to maintain its dividend payments at the same level in 2011 asin 2010. Also assume that all of the additional financing needed is in the form ofshort-te..

  Provide information on the board and management structure

Provide information on the board and management structure and critically comment on these with regards to corporate governance matters

  Calculate the change in ebit and the change in sales

Coca Cola reported 30.99 billion in sales in 2009 and 31.94 in 2008. Operating costs were 8.23 billion in 2009 and 8.45 in 2008. How do I calculate the change in EBIT and the change in sales?

  Analysis for the financial situation

Make a strengths and weaknesses portion S-W-O-T analysis for the financial situation of this organization. 2 sources must be used cited properly in APA format with references page.

  Bank b wants to charge the same effective rate on its

effective annual rates bank a offers loans at an 8 nominal rate its apr but requires that interest be paid quarterly

  What is causal story that the news story is trying to tell

Read the article A Messy Desk Encouragesd a Creative Mind by: Gretchen Reynolds. What is the causal story that the news story is trying to tell? Be specific

  Determine the internal rate of return for a project

Determine the internal rate of return for a project that costs -$104,000 and would yield after-tax cash flows of $16,000 the first year

  Three-stage cash flow model

Under what conditions would you use a two- or three-stage cash flow model rather than the constant growth?

  Calculate the effective annual cost of a one-year

Calculate the effective annual cost of a one-year $1,000,000 operating line of credit. The firm borrowed 600,000 for the first 5 months of the year and reduced the loan amount to $500,000 for the rest of the year. The quoted interest rate is 7.5 perc..

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