What is the standard deviation of your portfolio

Assignment Help Financial Management

Reference no: EM131302663

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 5.3%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 14 % 43 % Bond fund (B) 7 % 37 % The correlation between the fund returns is .0459. Suppose now that your portfolio must yield an expected return of 12% and be efficient, that is, on the best feasible CAL. a. What is the standard deviation of your portfolio? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Standard deviation 28.68 % b-1. What is the proportion invested in the T-bill fund? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Proportion invested in the T-bill fund % b-2. What is the proportion invested in each of the two risky funds? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Proportion Invested Stocks % Bonds %

Reference no: EM131302663

Questions Cloud

Prevalent reason why employees organize : What do you think is the most prevalent reason why employees organize? Defend your reasoning and discuss.

What are the annual annuity payments : A 10-year ordinary annuity that provides a return of 7% has a present value of $15,000. What are the annual annuity payments?

Why would paul romer in 2000 suggest dropping : The LM curve assumes that monetary policy takes the form of the Federal Reserve choosing a target for the money supply. Why would Paul Romer in 2000 suggest dropping the traditional LM curve and replacing it with the MP curve?

Who would stand to benefit from the repayment of debt : Would it be smarter to pay off debt using the $15 million rather than executing a dividend or payback? Why or why not? Who would stand to benefit from the repayment of debt?

What is the standard deviation of your portfolio : 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 5.3%. What is the standard devia..

Globalization and the challenges of unemployment : Although we aspire to attain a degree upon the completion of a dissertation, we also have to ensure our work influences or promotes social, practice, or organizational change. Take a few paragraphs to illustrate the value of your study and its met..

Fine tuning the economy with activist stabilization policy : Does the reality that the Fed and the government must rely on "real-time data" that is subject to revisions weaken or strengthen the argument against fine-tuning the economy with activist stabilization policy? Explain.

Calculates the annual amount of amortization : Prepare an excel worksheet with 3 tabs. A fair value allocation that shows the calculation of goodwill relative to the acquisition, and calculates the annual amount of amortization. (Hint: not all of the goodwill on Polly Co.'s balance sheet relat..

Outline and annotated bibliography : Provide a strong thesis statement outlines the path that your project will follow. Remember to reflect on an argumentative point of view (through an assumption or myth)

User Account

All Pages