Question

In: Finance

What is the expected return on a portfolio? How can the expected return on a portfolio...

What is the expected return on a portfolio? How can the expected return on a portfolio be manipulated to minimize the risk on that portfolio? Justify your answer

Solutions

Expert Solution

Note: If you have any query and require more information please mention it in the comments.

jeff jeffy answered 8 months ago
Next > < Previous

Related Solutions

The following are the expected returns on a portfolio of investments. What is the expected rate of return on the portfolio?
The following are the expected returns on a portfolio of investments. What is the expected rate of return on the portfolio? Investment # of shares Price per share Expected returnA. 2000 $20 10%B. 3000 $10 15%C. 1000 $15 8%
If a portfolio has a positive weight for each asset, can the expected return on the...
If a portfolio has a positive weight for each asset, can the expected return on the portfolio be greater than the return on the asset in the portfolio that has the highest return? Can theexpected return on the portfolio be less that the return on the asset in the portfolio with the lowest return? Explain.
If a portfolio has a positive weight for each asset, can the expected return on the...
If a portfolio has a positive weight for each asset, can the expected return on the portfolio be greater than the return on the asset in the portfolio that has the highest return? Can theexpected return on the portfolio be less that the return on the asset in the portfolio with the lowest return? Explain
What is the expected return on an equally weighted portfolio of these three stocks?
Consider the following information:    Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C Boom 0.74 0.23 0.25 0.17 Bust 0.26 0.11 0.15 0.11    Requirement 1: What is the expected return on an equally weighted portfolio of these three stocks? (Do not round your intermediate calculations.) (Click to select)19.24%21.74%31.27%34.04%13.51%    Requirement 2: What is the variance of a portfolio invested 10 percent each in A and B and 80 percent in...
How do you measure the expected return & risk of a portfolio? How the concept of...
How do you measure the expected return & risk of a portfolio? How the concept of correlation between asset returns is used in portfolio diversification? Explain.
4. Assume that the portfolio expected return for asset one is 0.15 and the expected return...
4. Assume that the portfolio expected return for asset one is 0.15 and the expected return for asset two is 0.10. The variance of both returns is one and the correlation between the returns is 0.75. Assume equal weighting for each asset. Compute the expected return and variance of the portfolio. Assume that the risk free rate is 0.05. Compute the Sharpe ratio of the portfolio. Now allocate 0.60 to asset one and 0.40 to asset two. Recompute all the...
1.how to Calculate the expected rate of return and volatility for a portfolio of investments and...
1.how to Calculate the expected rate of return and volatility for a portfolio of investments and describe how diversification affects the returns to a portfolio of investments ? 2.Understand the concept of systematic risk for an individual investment and calculate portfolio systematic risk (beta). 3.Estimate an investor’s required rate of return using the Capital Asset Pricing Model.
You are a portfolio manager of a risky portfolio with an expected rate of return of...
You are a portfolio manager of a risky portfolio with an expected rate of return of 14% and a standard deviation of 28%. The T-bill rate is 4%. Suppose your client decides to invest in your risky portfolio a proportion (y) of his total investment budget so that his overall portfolio will have an expected return of 10%. a. What is the proportion y ? b. What will be the standard deviation of your client’s portfolio ? c. What is...
Calculate the expected return and standard deviation of the portfolio.
A portfolio consists of two stocks:   Stock                 Expected Return            Standard Deviation             Weight   Stock 1                          10%                                     15%                            0.30 Stock 2                          13%                                     20%                            ???   The correlation between the two stocks’ return is 0.50   Calculate the expected return and standard deviation of the portfolio. Expected Return: Standard Deviation: (i) Briefly explain, in general, when there would be “benefits of diversification” (for any       portfolio of two securities).               (ii) Describe whether the above portfolio would...
Your portfolio is invested 25% each in A and C, and 50 percent in B. What is the expected return of the portfolio?
Consider the following information:   State of Economy Probability of State of Economy Stock A Stock B Stock C Boom .05 0.55 0.60 0.47 Good .15 0.46 0.25 0.28 Poor .35 -0.01 -0.06 -0.04 Bust .45 -0.12 -0.10 -0.09   a.    Your portfolio is invested 25% each in A and C, and 50 percent in B. What is the expected return of the portfolio?   b.        What is the variance of this portfolio? The standard deviation? 
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT