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Assume that you manage a risky portfolio with an expected rate of return of 15% and...
Assume that you manage a risky portfolio with an expected rate of return of 15% and a standard deviation of 25%. The T-bill rate is 5%.a.(5 points) Your client chooses to invest $6,000 in your fund and $4,000 in a T-bill money market fund. What is the reward-to-variability ratio (S) of your client’s overall portfolio?b.Suppose this client decides to invest in your risky portfolio a proportion (y) of his total investment budget ($10,000) so that his overall portfolio will have an expected rate of return of 15%. i.(5points) What is the proportion y? ii.(5points) What is the standard deviation of the rate of return onyour client’s portfolio?Is standard deviation of the rate of return on your client’s overall portfoliois higher or lower than standard deviation of the rate of return of risky portfolio? Why?
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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
jeff jeffy answered 1 year agoRelated Solutions
Assume that you manage a risky portfolio with an expected rate of return of 15% and...
Assume that you manage a risky portfolio with an expected rate
of return of 15% and a variance of 20%. The risk-free rate is
7%.
a) Draw capital allocation line considering the scenario: (i)
y=0, (ii) y=1 and (iii)
y=1.50; where, y is proportions of your investment in risky
assets.
b) Your client chooses to invest $15,000 in your fund and $5,000
in risk-free asset.
What is the reward-to-variability ratio of your client’s overall
portfolio?
c) Suppose this client decides...
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Your risky portfolio includes the following investments in the
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Stock A
22
%
Stock B
31
Stock C
47
Your client decides to invest in your risky portfolio a proportion
(y) of his total investment budget with the remainder in a
T-bill money market fund so that his overall portfolio will have...
Assume that you manage a risky portfolio with an expected rate of return of 15% and...
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Dell
50%
Apple
30%
HP
20%
What are the investment proportions of your client’s overall
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aversion coefficient is 3?
Dell
Apple
HP
T-Bill
A.
32%
B.
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C.
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D.
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Assume that you manage a risky portfolio with an expected rate of return of 15% and...
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Assume that you manage a risky portfolio with an expected rate of return of 12% and...
Assume that you manage a risky portfolio with an expected rate
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Assume you manage a risky portfolio with an expected rate of return of 12% and a...
Assume you manage a risky portfolio with an expected rate of
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portfolio will have an expected rate of return of 8%. What is the
proportion of y? Convert your answer to percentages with two
decimal points
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