Barry Swifter is 60 years of age and considering retirement. Barry's retirement portfolio currently is valued at $750,000 and is allocated in Treasury bills, an S&P 500 index fund, and an emerging market fund as follows: LOADING... Expected Return $ Value Treasury bills 2.5% 90,000 S&P 500 Index Fund 7.2% 410,000 Emerging Market Fund 13.5% 250,000 . a. Based on the current portfolio composition and the expected rates of return given above, what is the expected rate of return for Barry's portfolio? b. Barry is considering a reallocation of his investments to include more Treasury bills and less exposure to emerging markets. If Barry moves all of his money from the emerging market fund and puts it in Treasury bills, what will be the expected rate of return on the resulting portfolio? Question content area bottom Part 1 a. Based on the current portfolio composition and the given expected rates of return, the expected rate of return for Barry's portfolio is enter your response here%. (Round to two decimal places.) Part 2 b. If Barry moves all his money out of emerging market funds and puts it in Treasury bills, the expected rate of return for his portfolio is enter your response here%. (Round to two decimal places.)
Barry Swifter is 60 years of age and considering retirement. Barry's retirement portfolio currently is valued at $750,000 and is allocated in Treasury bills, an S&P 500 index fund, and an emerging market fund as follows: LOADING... Expected Return $ Value Treasury bills 2.5% 90,000 S&P 500 Index Fund 7.2% 410,000 Emerging Market Fund 13.5% 250,000 . a. Based on the current portfolio composition and the expected rates of return given above, what is the expected rate of return for Barry's portfolio? b. Barry is considering a reallocation of his investments to include more Treasury bills and less exposure to emerging markets. If Barry moves all of his money from the emerging market fund and puts it in Treasury bills, what will be the expected rate of return on the resulting portfolio? Question content area bottom Part 1 a. Based on the current portfolio composition and the given expected rates of return, the expected rate of return for Barry's portfolio is enter your response here%. (Round to two decimal places.) Part 2 b. If Barry moves all his money out of emerging market funds and puts it in Treasury bills, the expected rate of return for his portfolio is enter your response here%. (Round to two decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question content area top
Part 1
(Portfolio expected rate of return) Barry Swifter is 60 years of age and considering retirement. Barry's retirement portfolio currently is valued at $750,000 and is allocated in Treasury bills, an S&P 500 index fund, and an emerging market fund as follows:
LOADING...
.|
|
Expected
Return
|
$ Value
|
|---|---|---|
|
Treasury bills
|
2.5%
|
90,000
|
|
S&P 500 Index Fund
|
7.2%
|
410,000
|
|
Emerging Market Fund
|
13.5%
|
250,000
|
a. Based on the current portfolio composition and the expected rates of return given above, what is the expected rate of return for Barry's portfolio?
b. Barry is considering a reallocation of his investments to include more Treasury bills and less exposure to emerging markets. If Barry moves all of his money from the emerging market fund and puts it in Treasury bills, what will be the expected rate of return on the resulting portfolio?
Question content area bottom
Part 1
a. Based on the current portfolio composition and the given expected rates of return, the expected rate of return for Barry's portfolio is
enter your response here%.
(Round to two decimal places.)Part 2
b. If Barry moves all his money out of emerging market funds and puts it in Treasury bills, the expected rate of return for his portfolio is
enter your response here%.
(Round to two decimal places.)Expert Solution
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