Riley Stein estimates the expected returns for Cromarty LTD and Tindall Cos to be 13.6% and 9.4% respectively. She wants to build a portfolio with an expected return of 10.75%. The weight of Cromarty in the portfolio should be:

Riley Stein estimates the expected returns for Cromarty LTD and Tindall Cos to be 13.6% and 9.4% respectively. She wants to build a portfolio with an expected return of 10.75%. The weight of Cromarty in the portfolio should be:

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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Riley Stein estimates the
expected returns for Cromarty LTD and
Tindall Cos to be 13.6% and 9.4%
respectively. She wants to build a
portfolio with an expected return of
10.75%. The weight of Cromarty in the
portfolio should be:
O Type here to search
5:50 P
10/25/20

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An investor puts 60% of her assets in a risky portfolio with an expected return of 15% and variance of .038. She puts the remaining 40% in T-bills that pay 3%. What are a.) the expected return and b.) the standard deviation of her portfolio?
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You are a Morgan Stanley portfolio manager of a risky portfolio with an expected rate of return of 17% and a standard deviation of 28 %. The T - bill rate is 4%. Suppose your client decides to invest in your risky portfolio a proportion (y) of his total investment budget so that his overall portfolio will have a standard deviation of 10% . a. What is the proportion y?

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