Your risky portfolio includes the investments

Assignment Help Financial Management

Reference no: EM131984693

You manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 28%. The T-bill rate is 8%.

a. Your client chooses to invest 70% of a portfolio in you fund and 30% in an essentially risk-free money market fund. What is the expected value and standard deviation of the rate of return on his portfolio?

b. Suppose that your risky portfolio includes the following investments in the given proportions:

Stock A 25%

Stock B 32%

Stock C 43%

What are the investment proportions of your client's overall portfolio, including the position in T-bills?

c. What is the reward-to-volatility (Sharpe) ratio (S) of you risky portfolio? Your clients?

d. Draw the CAL of your portfolio on an expected return-standard deviation diagrm. What is the slop of the CAL? Show the position of your client on your fund's CAL.

Reference no: EM131984693

Questions Cloud

What are the investment merits of this transaction : Would you recommend that she buy the LaRamie preferred? Why? What are the investment merits of this transaction? What are its risks?

What was the cash price of the lot : What was the cash price of the lot? what must he pay at the time the 13th is due to bring himself up to date?

At what stock price would you receive a margin call : At what stock price would you receive a margin call if the maintenance margin is 30%? (do not consider dividends in question a)

Show how leverage increases financial risk : Show how leverage increases financial risk by calculating the EPS and return on equity for a firm with $1 million in 10 percent debt.

Your risky portfolio includes the investments : Suppose that your risky portfolio includes the following investments in the given proportions:

Considerable impacts in the united states : In conclusion, the two presidents left considerable impacts in the United States. However, President Wilson Woodrow was more successful due to his knowledge

Develop and pitch a business case in a real-world setting : Group report and group presentation: The business case - The assessment is designed for students to develop and pitch a business case in a real-world setting

What is the value to you of a 9 percent coupon bond : What is the value to you of a 9 percent coupon bond with a par value of $10,000 that matures in 10 years if you require a 7 percent return?

How can you backup oracle database using rman : What is RMAN? How can you Backup Oracle Database using RMAN? Give examples. How to recover a database if we lost the control file and we do not have a backup?

User Account

All Pages