Solution-What reward-to-variability ratio does the investor

What reward-to-variability ratio does the investor face

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Reference no: EM132967983

Problem 1: You manage an equity fund with an expected return of 12% and a S.D. of 20%. The rate on Treasury bills is 4%. Your client chooses to invest her entire portfolio in your equity fund plus borrow the same amount of money again at the T-bill rate to put into the fund also. What reward-to-variability ratio does this investor face?

a. 0.2
b. 0.4
c. 0.6
d. 0.8
e. Cannot be calculated as the client has borrowed money rather than buying T-bills.

Reference no: EM132967983

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What reward-to-variability ratio does the investor face

Reference no: EM132967983

Reference no: EM132967983

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