Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Assume that a fund that tracks S&P500 has the mean E(Rm) = 16 percent & the standard deviation σM = 10 percent, and assume that the T-Bill rate Rf = 80 percent. Answer the given problems about efficient portfolios:

[A] find out the expected return and standard deviation of a portfolio that has 125 percent of its wealth in the S&P, financed by borrowing 25% 0f its wealth at the risk-free rate?

[B] find out the weights for investing in the risk-free asset and the S&P that produce a standard deviation for the entire portfolio that is twice the standard deviation of the S&P? Determine the expected return value on that portfolio?

[C] find out the expected return and standard deviation of a portfolio that is totally invested in the risk-free asset?

[D] find out the expected return and standard deviation of a portfolio that has 50% of its wealth in the risk-free asset and 50 percent in the S&P?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M919147

Have any Question? 


Related Questions in Basic Finance

Case study questions -1 estimate green earths valuation for

Case Study Questions - 1) Estimate Green Earth's valuation for Charlotte Mill a) Estimate separately each of the components of the relevant WACC for the valuation, and the WACC itself. State explicitly the assumptions yo ...

Groupe danone is one of the largest food companies in the

Groupe Danone is one of the largest food companies in the world. It is the leading food company in France, Italy and Spain. It is ranked third in Europe and seventh worldwide. In Italy, Danone has invested more in probio ...

Why is there a doppler effect when the source of sound is

Why is there a Doppler effect when the source of sound is stationary and the listener is in motion? In which direction should the listener move to hear a higher frequency? A lower frequency?

What are inventories briefly explain what happens to the

What are inventories? Briefly explain what happens to the level of inventories when aggregate expenditure is greater than real GDP, what happens when aggregate expenditure is less than real GDP, and what happens when agg ...

The 2012 year-end adjusted balances taken from the general

The 2012 year-end adjusted balances taken from the general ledger of Cooperstown Services, Inc. are listed below in general ledger order. Coopertown Suppliers, Inc. DR CR Cash $12,950 Accounts receivable 28,150 Supplies ...

Empirical studies have established that the betas of

Empirical studies have established that the betas of conglomerate firms have been significantly above 1. What does this imply about diversification as a strong motive for conglomerate mergers? Over a long period of time ...

A firm has a capital structure that uses 45 percent equity

A firm has a capital structure that uses 45 percent equity, 20 percent preferred shares, and 35 percent debt. The preferred shares have a current yield of 5.5 percent. The debt has a coupon rate of 10 percent and a curre ...

Assume that european call and put options exist on a stock

Assume that European call and put options exist on a stock. That stock, however, is the target of a takeover in which an acquiring firm offers a fixed price for the stock. The takeover is almost certain to occur shortly ...

The performance of a journal bearing around a rotating

The performance of a journal bearing around a rotating shaft is a function of the following variables: Q, the rate of flow lubricating oil to the bearing in volume per unit time; D, the bearing diameter; N, the shaft spe ...

In a talk at the white house in december 2009 president

In a talk at the White House in December 2009, President Barack Obama argued: "Ultimately in this country we rise and fall together: banks and small businesses, consumers and large corporations." Why in this statement, d ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro