Question
In: Finance
A 4 Exapected Return 10% Risk Free Rate 4% Standard Deviation 13.00% What should be the...
| A | 4 | |
| Exapected Return | 10% | |
| Risk Free Rate | 4% | |
| Standard Deviation | 13.00% | |
|
What should be the weight of Risky Portfolio 95.25% 75.49% 88.75% 83.92% |
||
Solutions
Expert Solution
Weight of Risky Portfolio = (Expected retun - Risk free rate) / (risk aversion coefficiennt * standard deviation^2)
= (10% - 4%) / (4 * 13%^2)
= 0.06 / 0.0676
= 88.75%
Weight of Risky Portfolio = 88.75%
jeff jeffy answered 2 years agoRelated Solutions
What is the standard deviation of the risk-free rate?
You expect the following set of possible outcomes for a
stock:OutcomeProbabilityEnding Stock PriceHolding Period Return(Percent)Risk-free rate(Percent)Good35%$12044.54Neutral30%$100142Bad35%$70-16.5.5What is the standard deviation of the risk-free rate? Please
enter your answer in percent rounded to the nearest basis
point.
The market expected return is 14% with a standard deviation of 18%. The risk-free rate is...
The market expected return is 14% with a standard deviation of
18%. The risk-free rate is 6%. Security XYZ has just paid a
dividend of $1 and has a current price of $13.95. What is the beta
of Security XYZ if its dividend is expected to grow at 6% per year
indefinitely?
1.05
0.85
0.90
0.95
The risk-free rate is 1% while the expected return and standard deviation of the market portfolio...
The risk-free rate is 1% while the expected return and standard
deviation of the market portfolio (S&P
500) are 9% and 19%, respectively.
(a) What is the standard deviation of
a combination of risk-free security and S&P 500 that has an
expected return of 12%? What is its
probability of loss? Assume that the S&P 500 returns have
a normal probability distribution.
(b) The optimal allocation to S&P
500 for an investor is 60%. What will be the optimal allocation...
If the risk-free rate is 5% and the return on the market is 10%, what is...
If the risk-free rate is 5% and the return on the market is 10%,
what is alpha equal to for a stock with a beta of 2 that has an
expected return of 15%?
The risk-free rate, S&P 500 index, and the average return, standard deviation, beta, and residual standard...
The risk-free rate, S&P 500 index, and the average return,
standard deviation, beta, and residual standard deviation for three
funds are given.
Fund
Avg. Return
Std. Dev.
Beta
Residual Std. Dev.
A
B
C
S&P 500
Risk-free
18
25
22
12
4
15
30
20
10
0
1.3
1.4
1.2
1.0
0
1.5
2.5
3.0
1.Figure out the M2 measure for Fund A and B
2.Figure out the best fund based on the information ratio
Use the following table.
Your...
The risk-free rate, S&P 500 index, and the average return, standard deviation, beta, and residual standard...
The risk-free rate, S&P 500 index, and the average return,
standard deviation, beta, and residual standard deviation for three
funds are given.
Fund
Avg. Return
Std. Dev.
Beta
Residual Std. Dev.
A
B
C
S&P 500
Risk-free
18
25
22
12
4
15
30
20
10
0
1.3
1.4
1.2
1.0
0
1.5
2.5
3.0
Figure out the M2 measure
for Fund A and B.
Figure out the best fund based on the information
ratio.
Use the following table.
Your...
The risk free rate is 4%, and the required return on the market is 12%. What...
The risk free rate is 4%, and the required return on the market
is 12%.
What is the required return on an asset with a beta of
1.5?
What is the reward/risk ratio given the required rate of return
from (a)?
What is the required return on a portfolio consisting of 40% of
the asset above and the rest in an asset with an average amount of
systematic risk? (hint: asset with an average amount of systematic
risk has beta...
The risk-free rate of return is 4 percent, and the expected return on the market is...
The risk-free rate of return is 4 percent, and the expected
return on the market is 8.2 percent. Stock A has a beta coefficient
of 1.6, an earnings and dividend growth rate of 6 percent, and a
current dividend of $2.20 a share. Do not round intermediate
calculations. Round your answers to the nearest cent.
What should be the market price of the stock? $
If the current market price of the stock is $32.00, what should
you do? The...
The risk-free rate of return is 4 percent, and the expected return on the market is...
The risk-free rate of return is 4 percent, and the expected
return on the market is 7.5 percent. Stock A has a beta coefficient
of 1.6, an earnings and dividend growth rate of 8 percent, and a
current dividend of $2.10 a share. Do not round intermediate
calculations. Round your answers to the nearest cent.
a) What should be the market price of the stock?
b) If the current market price of the stock is $118.00, what
should you do?...
stocks are 50/50.using Risk free rate (6.75%)and risk aversion of(3.75%) determine expected return and standard deviation...
stocks are 50/50.using Risk free rate (6.75%)and risk aversion
of(3.75%) determine expected return and standard deviation of ur
portfolio..
Standard Deviation for stock ABC =23.87% and XYZ = 14.61% and
mean is 6.57% and 18.63%
Correlation is Abc=1.00 and XYZ = 0.3230
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Part A. Outline and explain all the VARIABLES and FACTORS that determine valuation and valuation analysis...
- Study the file polygon.h. It contains the header file for a class of regular polygons. Implement...
- what challenges can myths and stereotypes create for american indians?
- Date accuracy is very important because dates are used for discounts, payment terms and many reports....
- How many milliliters of concentrated hydrochloric acid solution (36.0% HCl by mass, density = 1.18 g/mL)...
- How does the rotating membership of the FOMC work? Why does the president of New York's...
- A gym owner is considering opening a location on the other side of town. The new...
ADVERTISEMENT