expected return and standard deviation of a bond fund b is 4% and 9%, respectively. The...

expected return and standard deviation of a bond fund b is 4% and 9%, respectively. The expected return and standard deviation of a stock fund s is 12% and 25%, respectively. The correlation between two fund returns is 0.1. What is the standard deviation of a portfolio that invests 40% in s and the rest in b?

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jeff jeffy answered 2 years ago

Fund A offer an expected return of 8% with a standard deviation of 15%, and Fund...

Fund A offer an expected return of 8% with a standard deviation of 15%, and Fund B offers an expected return of 5% with a standard deviation of 25%. a. Would Fund B be held by investors?Explainwith the aid of a diagram using Markowitz Portfoliotheory.(8marks) b. How would you answer part a. if the correlation coefficient between Funds A and B were 1? Could these expected returnsand standard deviationsrepresent an equilibrium in the market?(12marks)

Expected Return Standard Deviation Stock fund (S) 20% &nbsp

Expected Return Standard Deviation Stock fund (S) 20% 30% Bond fund (B) 12% 15% Correlation = .10 7. If you were to use only the two risky funds, and still require an expected return of 14%, what would be the investment proportions of your portfolio? Compare its standard deviation to that of the optimized portfolio in Problem 9. What do you conclude? Problem 9 Stock Expected Return Standard Deviation A 10% 5% B...

You estimate that the expected return of MSFT stock is 4%, and standard deviation of MSFT stock is 9%.The expected return of AAPL stock is 3%,and

You estimate that the expected return of MSFT stock is 4%, and standard deviation of MSFT stock is 9%.The expected return of AAPL stock is 3%,and standard deviation of MSFT stock is8%. If the correlation between AAP Lreturns and MSFT returns is 80%,what is the expected return and standard deviation of a portfolio with $4,000 invested in MSFT and $6,000 invested in AAPL?

Asset A has an expected return of 15% and standard deviation of 20%. Asset B has an expected return of 20% and standard deviation of 15%.

1. Asset A has an expected return of 15% and standard deviation of 20%. Asset B has an expected return of 20% and standard deviation of 15%. The riskfree rate is 5%. A risk-averse investor would prefer a portfolio using the risk-free asset and _______. A) asset A B) asset B C) no risky asset D) cannot tell from data provided2. The Sharpe-ratio is useful for A) borrowing capital for investing B) investing available capital C) correctly...

What are the expected return and standard deviation of stock A and stock B?

Consider the following information: State Probability A B Boom 0.6 20% -5% Bust 0.4 -10% 10%What are the expected return and standard deviation of stock A and stock B?If you invest 50% of your money in stock A and 50% of your money in stock B, what are the expected return and standard deviation for the portfolio as a whole (considering both states of the economy)?Use the results...

There are 2 assets. Asset 1: Expected return 7.5%, standard deviation 9% Asset 2: Expected return...

There are 2 assets. Asset 1: Expected return 7.5%, standard deviation 9% Asset 2: Expected return 11%, standard deviation 12%, correlation with asset 1 is 0.4 You hold 30% of your portfolio in asset 1 and 70% in asset 2. a) (1 point) What is the expected return of your portfolio? b) (1 point) What is the covariance between assets 1 and 2? c) (1 point) What is the standard deviation of your portfolio?

The expected return on Big Time Toys is 9% and its standard deviation is 21.9%. The...

The expected return on Big Time Toys is 9% and its standard deviation is 21.9%. The expected return on Chemical Industries is 10% and its standard deviation is 29%. a. Suppose the correlation coefficient for the two stocks' returns is 0.2. What are the expected return and standard deviation of a portfolio with 34% invested in Big Time Toys and the rest in Chemical Industries? (Round your answers to 2 decimal places.) Portfolio's expected return % Portfolio's standard deviation...

Assume the following information pertains to three mutual funds FUND Expected Return Standard Deviation of Return...

Assume the following information pertains to three mutual funds FUND Expected Return Standard Deviation of Return U.S. Bond 6% 12% U.S. Equity 11% 20% U.S. REIT 8% 18% Assume that the correlation between U.S. Bond and U.S. Equity is 10%, the correlation between U.S. Bond and U.S. REIT is 70%, and the correlation between U.S. Equity and U.S. REIT is 60%. a) What is the standard deviation of this portfolio of 20% Bond, 20% REIT and...

You manage a risky mutual fund with expected rate of return of 18% and standard deviation...

You manage a risky mutual fund with expected rate of return of 18% and standard deviation of 28%. The T-bill rate is 8%. What is the slope of the CAL of your risky mutual fund? Show the position of your client on your fund’s CAL. Suppose that your client decides to invest in your portfolio a proportion ‘y’ of the total investment budget so that the overall portfolio will have an expected rate of return of 16%. What is the...

An investor is considering an exchange traded fund with 12% expected return and 24% standard deviation....

An investor is considering an exchange traded fund with 12% expected return and 24% standard deviation. What will be his expected return, if his risk aversion coefficient is 4? The risk free rate is 2%. The investor maximizes his utility. 43.4% 0.434% 6.34% 3.04%

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