If a fund has a return of 12% and a beta of 1.4, and if the risk-free rate is 2%, then what is its Treynor ratio   O a. 7.14   Ob. 2.35   O c. 3.14   O d. 5.35

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A: Beta: Beta can be defined as the measure of instability of a separate stock relative to the…

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A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: The NXP fund has an expected return of 3.60%, with volatility 24.00%. The risk free rate is 1.70%,…

A: The reward-to-volatility ratio, also known as the Treynor ratio, gauges how much excess return a…

Q: What is kd of investment whose Beta is 1.4 and market premium is 8% while risk free rate is 5%?

A: Here kd of investment means cost of investment, therefore we need to calculate cost of investment…

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A: The expected rate of return refers to the minimum required rate by the investors for the investment.…

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Q: 11-2 What is the expected return of the following investment? Probability Payoff 0.3 30.0% 0.2 10.0…

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A: Share Measure of Performance of Fund A  Sharpe Measure means the Amount of return per unit of risk.…

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A: Jensen's alpha = Average return less CAPM return of stock

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A: Expected return of the market could be computed by multiplying the returns under different economic…

Q: harpe’s ratio of the Fund A is 1.5, if the beta of Fund A is 1.2, and risk of the fund is 10,…

A: Solution Given Sharpe’s ratio of the Fund A 1.5  beta of Fund A 1.2 risk of the fund…

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A: Given, Expected return = 17% Standard deviation = 36% T-bill rate = 6%

Q: Find the optimal risky portfolio if you could only use these two funds, ABC and 123,  assume the two…

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A: CAPM is the model that is used to show the linear relation between systematic risk…

Q: 4. Asset Z has an expected return of 9.5 percent and a beta of 0.85. If the risk-free rate is 2.2…

A: We can determine the expected return of the portfolio using the formula below: Expected Return =…

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A: Expected return (Re) = 15% Risk free rate (Rf) = 4% Standard deviation (SD) = 26%

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Q: If you want to have 14,000 at the end of year 5, how much should you have to save each year if the…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: If you have a weighted value of 12.8% and a return of 16% what is the probability? a. 10% 129/

A: Given: Weight = 12.8% Return = 16%

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A: Probability Return 0.5 20% 0.4 10% 0.1 -10%

Q: Risky asset P (an index fund) and risk-free asset F (T-Bill), form a complete portfolio C using P…

A: Given:E(rP)=0.15σP=0.22rf=0.07A=4Calculate y∗: y* = E(rp) - rf / (4 * σp^2)= (15% - 7%) / (4 *…

Q: If $x is invested in mutual fund A, the annual return has an expectation of $0.1x and a standard…

A: Here,Expectation of Fund A is $0.1 of invetsed AmountExpectation of Fund B is $0.1 of invested…

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A: The coefficient of variation is a measure that depicts how much risk is assumed in comparison to the…

Q: lity function U = E(r) Ac€?o 0.5AA?A?2 and the fact that T-bill offer a risk-free rate of 4%, what…

A: Some investors are risk averse that means they do not want to take risk and they tends to avoid risk…

Q: The following data are available for two assets A and B: E(rA) = 13% E(rB) = 15%…

A: E(rA) =    13% E(rB) = 15% s(rA) = 22% s(rB) = 24% rA,B = 0

Q: Suppose that a fund that tracks the S&P has mean E(RM) = 16% and standard deviation OM = 10%, and…

A: Standard Deviation is mesaure the risk which is involved in earning the return from the stock. Lower…

Q: Consider the following two portfolios. Portfolio A has an expected return of 9%, a standard…

A: The objective of the question is to find the beta of Portfolio B using the Capital Asset Pricing…

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Q: Risk-free rate is 7% 2. Calculate the required rate of return for A. 1. 8.90% 2. 8.40% 3. 8.70% 4.…

A: Required return is sum product of expected return and respective probability. Required return = ∑p*R…

Q: The risk free rate is 2% and the expected return on the market is 8% . Lexington fund has expected…

A: treynor ratio =  (expected return - risk free rate) / beta

Q: If the risk free rate is 3% and the risk premium is 5%. Find the required return

A: Given: Risk free rate = 3% Risk premium = 5%

Q: The NXP fund has an expected return of 3.60%, with volatility 24.00%. The risk free rate is 1.70% ,…

A: The reward-to-volatility ratio, also known as the Treynor ratio, gauges how much excess return a…

Q: If benchmark Sharpe’s Ratio is 1.5, return of the market is 13% and, risk free rate is 4%, standard…

A:

Q: Annual returns for three funds and a market index are given below: Fund A Rp 17.1 Op 28.1 Beta (Bp)…

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A: Sharpe ratio refers to the method used for the measurement of the volatility of the returns related…

Q: If the risk free rate is 3.6 percent and the risk premium is 4.6 percent what is the required…

A: Here,Risk Free Rate is 3.6%Risk Premium is 4.6%

Q: Index. Fund Average Return Standard Deviation Beta A 14% 28.5% 1.7 S&P 500 17.6% 19.4% 1 Risk-free…

A: treynor ratio =rA-rfβA where, rA=return of stock Arf=risk free rateβA=beta of stock A

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A: Step 1: Calculate the Expected ReturnsExpected Market Return (E(Rm)):                Expected Return…

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A: The Capital Asset Pricing Model (CAPM) is a financial model that helps investors understand the…

Q: f a fund has a return of 12% and a beta of 1.4, and if the risk-free rate is 2%, and market return…

A: Alpha of stock is excess return earned over the return calculated by CAPM.

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A: Jensen's Alpha measures the excess of actual return over expected return as per Capital asset…