What is your portfolio expected return

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1. Assume that as an investor, you decide to invest 30% of your wealth in a risky asset that has an expected return of 24%, and a standard deviation of 17%. You invest the rest of your capital in the risk-free rate, which offers a return of 3%. What is your portfolio's expected return?

a. Assume that as an investor, you decide to invest 45% of your wealth in a risky asset that has an expected return of 7%, and a standard deviation of 15%. You invest the rest of your capital in the risk-free rate, which offers a return of 3%. What is your portfolio's standard deviation?

b. Given an optimal risky portfolio with expected return of 9% and standard deviation of 11% and a risk free rate of 2%, what is the slope of the best feasible CAL?

c. Consider the single-index model. The alpha of a stock is 0%. The return on the market index is 17%. The risk-free rate of return is 2%. The stock earns a return that exceeds the risk-free rate by 29% and there are no firm-specific events affecting the stock performance. The beta of the stock is?

Reference no: EM131944597

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