Required: You manage an equity fund with an expected risk premium of 14% and a standard deviation of 54%. The rate on Treasury bills is 6.8%. Your client chooses to invest $120,000 of her portfolio in your equity fund and $30,000 in a T-bill money market fund. What are the expected return and standard deviation of your client's portfolio? (Round your answers to 2 decimal places.) Expected Return Standard Deviation % %
Required: You manage an equity fund with an expected risk premium of 14% and a standard deviation of 54%. The rate on Treasury bills is 6.8%. Your client chooses to invest $120,000 of her portfolio in your equity fund and $30,000 in a T-bill money market fund. What are the expected return and standard deviation of your client's portfolio? (Round your answers to 2 decimal places.) Expected Return Standard Deviation % %
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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You manage an equity fund with an expected risk premium of 13.6% and a standard deviation of 50%. The rate on Treasury bills is
6.6%. Your client chooses to invest $120,000 of her portfolio in your equity fund and $30,000 in a T-bill money market fund. What is the
reward-to-volatility (Sharpe) ratio for the equity fund? (Round your answer to 4 decimal places.)
Reward-to-volatility Ratio
Transcribed Image Text:Required:
You manage an equity fund with an expected risk premium of 14% and a standard deviation of 54%. The rate on Treasury bills is 6.8%.
Your client chooses to invest $120,000 of her portfolio in your equity fund and $30,000 in a T-bill money market fund. What are the
expected return and standard deviation of your client's portfolio? (Round your answers to 2 decimal places.)
Expected Return
Standard Deviation
%
%
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