Clark Lawson is a portfolio management at HCC (High Cost Capital), a passive management boutique. He has selected 5 equity ETFS and 5 bond ETFs to build one STOCK and and one BOND fund (shown in the table below). Please mark the only INCORRECT statement about the Equity and the BOND ETF funds. Round it to ETFS Equities Weight in Portfolio NTRN (Neutron) US equities Galaxy Global MSCI equities Emerging Asia ex-Japan stocks S&P Utilities and Healthcare Super Tech digital shares Bonds SECOND decimal case US bond universe US investment grade ETF Global bonds ETF Europe High Yield ETF Emerging Market EMBI ETF 22% 20% 25% 11% 22% 15% 25% 15% 25% 20% Expected Return 21.7% 28.0% 12.1% 16.0% 22.0% 9.0% 8.0% 6.2% 11.9% 13.7% O a. The expected return of a portfolio consisting of 50% of the Equity Fund and 50% of the Bond fund is 16.00% O b. The beta of the Equity portfolio is 1.1000 O c. The expected returns of the equities and bond portfolios are 20.00% and 10.00%, respectively Od. The duration of the Bond portfolio is 6.00 years. Beta Duration 1.200 0.800 1.201 0.404 1.506 8.00 5.00 7.00 4.00 7.50
Clark Lawson is a portfolio management at HCC (High Cost Capital), a passive management boutique. He has selected 5 equity ETFS and 5 bond ETFs to build one STOCK and and one BOND fund (shown in the table below). Please mark the only INCORRECT statement about the Equity and the BOND ETF funds. Round it to ETFS Equities Weight in Portfolio NTRN (Neutron) US equities Galaxy Global MSCI equities Emerging Asia ex-Japan stocks S&P Utilities and Healthcare Super Tech digital shares Bonds SECOND decimal case US bond universe US investment grade ETF Global bonds ETF Europe High Yield ETF Emerging Market EMBI ETF 22% 20% 25% 11% 22% 15% 25% 15% 25% 20% Expected Return 21.7% 28.0% 12.1% 16.0% 22.0% 9.0% 8.0% 6.2% 11.9% 13.7% O a. The expected return of a portfolio consisting of 50% of the Equity Fund and 50% of the Bond fund is 16.00% O b. The beta of the Equity portfolio is 1.1000 O c. The expected returns of the equities and bond portfolios are 20.00% and 10.00%, respectively Od. The duration of the Bond portfolio is 6.00 years. Beta Duration 1.200 0.800 1.201 0.404 1.506 8.00 5.00 7.00 4.00 7.50
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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Transcribed Image Text:Clark Lawson is a portfolio management at HCC (High Cost Capital), a passive management boutique. He has selected 5 equity ETFs and 5 bond ETFs to build one
STOCK and and one BOND fund (shown in the table below). Please mark the only INCORRECT statement about the Equity and the BOND ETF funds. Round it to
ETFs
Weight in Portfolio
SECOND decimal case
Equities
NTRN (Neutron) US equities
Galaxy Global MSCI equities
Emerging Asia ex-Japan stocks
S&P Utilities and Healthcare
Super Tech digital shares
Bonds
US bond universe
US investment grade ETF
Global bonds ETF
Europe High Yield ETF
Emerging Market EMBI ETF
22%
20%
25%
11%
22%
15%
25%
15%
25%
20%
Expected Return
21.7%
28.0%
12.1%
16.0%
22.0%
9.0%
8.0%
6.2%
11.9%
13.7%
a. The expected return of a portfolio consisting of 50% of the Equity Fund and 50% of the Bond fund is 16.00%
b. The beta of the Equity portfolio is 1.1000
c. The expected returns of the equities and bond portfolios are 20.00% and 10.00%, respectively
d. The duration of the Bond portfolio is 6.00 years
Beta
Duration
1.200
0.800
1.201
0.404
1.506
8.00
5.00
7.00
4.00
7.50
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