Suppose you have $20,000 available to invest and the risk-free rate, as well as your borrowing rate, is 3%, and the expected return on the risky portfolio is 12%. The standard deviation of the risky portfolio is 18%. If you construct a complete portfolio with an expected return of 9%, the standard deviation of your portfolio is _______%

Q: You manage a risky portfolio with expected rate of return of 20% and standard deviation of 36%. The…

A: Expected return on portfolio, E(Rp) = 20%Risk aversion, A = 1.6Risk free rate = 5% Standard…

Q: "An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected…

A: Optimum risk portfolio is 0.084Explanation:

Q: Assume the riskless rate of interest is 2% per year, and the expected rate of return on the market…

A: The expected return is the profit margin or loss that an investment may anticipate by the investor.…

Q: You have identified the tangent market portfolio, which has an expected return of 10.4% and a…

A: Volatility of tangent portfolio (SD) = 33.9% Volatility of risk free portfolio = 0 Weight of tangent…

Q: You invest $100 in a risky asset with an expected return of 12% and a standard deviation of 15%, and…

A: The percentage of money invested in T bills can be computed with the concept of portfolio expected…

Q: volatility of 12%. Is the portfolio A you hold now efficient? If not, construct a portfolio that…

A: This is a concept of Portfolio management where we need to compare different components to construct…

Q: Suppose you have a portfolio consisting of two assets, A and B. Stock A has an expected return of…

A: Portfolio variance = w12σ12 + w22σ22 + 2w1w2Cov1,2Where:w1 = the portfolio weight of the first…

Q: Assume that you manage a risky portfolio with an expected rate of return of 18% and a standard…

A: The investment proportions of the individual assets are given above on the basis of 50% of…

Q: What is the expected return of a portfolio that has $8,000 invested in S and $2,000 invested in T?…

A: The expected return of the portfolio can be calculated as:E(R_p) = R_f + β_p * (E(R_m) -…

Q: The optimal risky portfolio has an expected return of 15% and a standard deviation of 10%. The…

A: Optimal risky portfolio is suitable to risk averse investors who want to minimise their investment…

Q: Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either…

A: The expected return is the estimation of profit or loss that an investor determines from his…

Q: Return on a portfolio may be roughly categorized into three levels: high, medium, and low. If the…

A: The expected return is the gain or loss that an investor can anticipate on an investment made. It is…

Q: Required: a. What proportion, y, of the total investment should be invested in your fund? b. What…

A: The expected return is a useful tool for estimating the potential average profit or loss on an…

Q: 1) You are considering investing $1,900 in a complete portfolio. The complete portfolio is composed…

A: Expected return on T-bills = 3%Weight of X in P = 65%Weight of Y in P = 35%Expected return on X =…

Q: You manage a risky portfolio with an expected return of 12% and a standard deviation of 24%.…

A: The objective of the question is to understand the concept of Capital Allocation Line (CAL) and…

Q: Consider the following two investment alternatives: First, a risky portfolio that pays a 15% rate of…

A: Given: Return Probability 15% 40% 5% 60%

Q: You plan to put 50% of your wealth into each assets. What would the expected return be for the…

A: Expected return on a portfolio is the rate of return that is required to generate from the…

Q: You compute the optimal risky portfolio to have the expected return of 12% and standard deviation of…

A: Here, Expected Return of Portfolio  is 12% Standard Deviation is 20% Risk-free rate is 4% Risk…

Q: Jse this input to answer following questions: You manage a risky portfolio with an expected rate of…

A: Expected Return on Risky Portfolio = 12% Standard Deviation of Risky Portfolio = 20% Risk Free Rate…

Q: Assume the CAPM holds. You are holding a portfolio with the beta of 2 and the standard deviation of…

A: We have an inefficient portfolio here. We have to make it efficient and find out the possibility of…

Q: risk-averse investor is interested to know the Sharpe ratio of the portfolio to make an investment…

A: Risk-free rate = 2.5%Portfolio standard deviation = 5% Market return = 10%Portfolio' expected return…

Q: An investor invests 30% of his funds in risk free asset and the remaining 70% of funds in an index…

A: The objective of the question is to calculate the expected return and risk of a portfolio using the…

Q: You invest 80% of your portfolio in a risky portfolio that has an expected rate of return of 15% and…

A: Given: Weight of risky portfolio = 80% Expected return = 15% Standard deviation = 21% T bill rate =…

Q: You are considering investing $1,000 in a complete portfolioin a T - bill that pays a rate of return…

A: A portfolio is an assortment or mixture of investments, cash, stocks, bonds, and other financial…

Q: You invest $600 in security A with a beta of 1.2 and $400 in security B with a beta of 0.90. The…

A: Beta: It is the systematic risk of security or bunch of securities (portfolio) as compared to the…

Q: Suppose you have a portfolio worth $10000. Assuming normally distributed portfolio returns,…

A: Portfolio value=$10,000Expected return=24%Variance=22%Required:Value at Risk at 5% Dollar value=?

Q: You will have a portfolio that is only comprised of two assets. You plan to allocate 47.1% into…

A: Expected return on a portfolio refers to the anticipated gain or loss that an investor can expect…

Q: Assume you wish to construct a portfolio by investing $4000 in Stock A which has a return of 6% and…

A: Expected return of a portfolio is the sum of weighted average returns of individual stocks.

Q: You are constructing a portfolio of two assets, Asset A and Asset B. The expected returns of the…

A: To address this question initially, we must calculate the weight of each asset using the following…

Q: You are considering investing $1,100 in a complete portfolio. The complete portfolio is composed of…

A: Risky portfolio: Expected return of risky portfolio=WeightX×ReturnX+WeightY×ReturnYExpected return…

Q: You are considering investing $1000 in a complete portfolio. The complete portfolio is composed of…

A: Investment = $1,000Return on treasury bills = 5%Weight of X = 60%Weight of Y = 40%Return from X =…

Q: Efficient portfolios are complete portfolios that contain the risk-free asset and the market…

A: Efficient portfolio is the portfolio which has highest rate of return for a given level of risk and…

Q: An investor with a risk aversion of 3.5 can buy a risk-free asset with an expected return of 3% and…

A: A portfolio is a collection of assets such as stocks, bonds, and cash equivalents held by an…

Q: Suppose the assumption behind that the CAPM hold. The risk free rate is 2% and the expected return…

A:

Q: The market portfolio has expected return of 12% and risk of 19%, and the risk-free rate is 5%.…

A: The optimal risky portfolio's expected return is linked to the risk-free rate of return by a…

Q: An investor can design a complete portfolio based on a risky portfolio and a risk-free asset. The…

A: The funds infused into the various investment alternatives available in the market is recognized as…

Q: You currently have $100,000 invested in a portfolio that has an expected return of 10% and a…

A: To solve this, we can use the concepts of combining risky and risk-free assets in a portfolio to…

Q: Expected return and standard of a risky portfolio are 11% and 21% respectively. Risk-free rate is…

A: Here, Expected Return of Risky Portfolio is 11% Standard Deviation of Risky Portfolio is 21% Risk…

Q: Assume that you manage a risky portfolio with an expected rate of return of 17% and a standard…

A: Investment in stock refers to an amount that is being invested by investors for the purpose of…

Q: You manage a risky portfolio containing 25% of Stock A, 32% of Stock B and 43% of Stock C,…

A: A portfolio is a mix of various investment alternatives in which the investor put his money. The CAL…

Q: You calculated that the average retum of your portfolio is 3% and the standard deviation is 22%,…

A: The objective of this question is to calculate the Value at Risk (VaR) for a portfolio given the…

Q: ou invest 50% of your wealth in risky asset A and 50% in the risk-free asset. E(ra) is 10% and OA is…

A: The question gives equal weights to both the risky asset and riskfree asset.  We can determine the…

Q: Suppose you invest equal amounts in a portfolio with an expected return of 16% and a standard…

A: Solution:- Standard deviation of returns of portfolio means the average variability of returns of…

Q: You are constructing a portfolio of two assets, Asset A and Asset B. The expected returns of the…

A: To solve this question first, we need to compute weight of each asset by using the following…