What is the expected return on this portfolio

Q: beta of 1.40 and an expected return of 19%. Stock Z has a beta of 0.65 and an expected return of…

A: We need to compute expected return using CAPM (Capital asset pricing model) for each stock. CAPM…

Q: Consider two stocks A and B. Both have an expected return of 10%, and their standard deviations are…

A: The process of choosing a mix of securities or assets that optimizes returns for a given level of…

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: You create a portfolio that invests 60% in stock A with E(rA) = 15%, σA = 10% and 40% in stock B…

A: According to bartleby guidelines , if question involves multiple sub parts , then 1st sub 3 parts…

Q: Asset A offers an expected rate of return of 25%, with a standard deviation of 20%. Asset B offers…

A: Optimal risky portfolio of two assets A and B is the portfolio with certain weights of asset A and…

Q: Suppose that the risk-free rate of return is 5%, and the expected rate of return on the market…

A: Risk-free rate of return5%Expected return on market portfolio14%Beta of stock X0.8Beta of stock…

Q: Suppose you have a portfolio that has $290 in stock A with a beta of 1.04, $1, 160 in stock B with a…

A: Beta of portfolio is computed as follows:-Bp = (Ba*Wa)+(Bb*Wb)+(Br*Wr)+(Bs*Ws)whereBp =beta of…

Q: Suppose that a portfolio consist of three securities: A, B and C with expected rates of return of…

A: Portfolio refers to basket of different financial assets in which investment is made by single…

Q: If your portfolio includes 35 percent of X, 40 percent of Y and 25 percent of Z, answer the…

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

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: Assume you have an optimal risky portfolio with an expected return of 17% and a standard deviation…

A: Expected return (Re) = 17% Risk free rate (Rf) = 5% Risk aversion measure (A) = 2 Standard deviation…

Q: You've assembled the following portfolio: Stock Expected return Beta Portfolio weight 1 0.128 1.8…

A: Beta is primarily used to calculate the systematic risk in the capital asset pricing model. The beta…

Q: Suppose CAPM is true. You are considering investing in an equally weighted portfolio of two stocks,…

A: Variance of two asset portfolio Consider a portfolio consisting of two assets asset A and asset B.…

Q: Use the following table to answer the questions a-c below. Standard deviation of risky portfolio 3.5…

A: Note: We’ll answer the first question, including sub-parts since the exact one wasn’t specified.…

Q: The following are estimates for two stocks. Stock A B Expected Return 0.16 0.19 Beta 0.84 1.23…

A:

Q: Standard deviation of the portfolio with stock A is 22.86 %. (Round to decimal places.) Standard…

A: Companies invest their money in different portfolios. Before investing money in any portfolio…

Q: You are given the following information concerning three portfolios, the market portfolio, and the…

A: PortfolioRpσpBpX12.00%29.00%1.25Y11.00%24.00%1.1Z8.00%14.00%0.75Market10.00%19.00%1Risk-free4.00%0.0…

Q: Assume the market portfolio's and risk-free rate's projected returns are 13% and 3%, respectively.…

A: There are various portfolio performance measures and one such measure is Treynors' ratio. This ratio…

Q: Consider the following probability distribution for stocks C and D: State Probability Return on…

A: ProbabilityReturn on stock CReturn on stock D0.307%-9%0.5011%14%0.20-16%26%Proportion invested25%75%

Q: An equally-weighted portfolio that consists of 13 stocks has a beta of 1.5. If you replace one of…

A: As per the given information: Number of Stocks =13 Beta of 13 stocks = 1.5 Replacing Stock with a…

Q: Will upvote if correct round to 4 decimal places Stock A has an expected return of 16% and a…

A: Optimal risky portfolio is the portfolio with combination of each stock in which the risk of…

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: sset X has a beta of 1.7 and an expected return of 15.1%. Asset Y has a beta of .70 and an expected…

A: Let the total portfolio should of $ 1.     Total portfolio = Investment in Asset X + Investment in…

Q: The following expected return and the standard deviation of current returns are known: Security…

A: Portfolio standard deviation is the standard deviation of all the different investments in the…

Q: Stock Y has a beta of 0.9 and an expected return of 11.4 percent. Stock Z has a beta of 1.5 and an…

A: Expected return is an important metric in investment analysis, as it helps investors assess the…

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

A:

Q: Suppose that the index model for stocks A and B is estimated from excess returns with the following…

A: The standard deviation of a portfolio is a statistical measure of the variability or volatility of…

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

A:

Q: Calculate the Sharpe ratio, Treynor ratio, M-squared and Jensen's alpha for a stock with an expected…

A: 1) Sharp ratio = (Return of the portfolio - Return of Risk free investment) / Standard deviation of…

Q: Fiona constructs an investment portfolio using two common stocks, A and B. a. Suppose the weight…

A: Part A: Weight of A = 0.50 Weight of B = (1 - weight A)                     = (1 - 0.50)…

Q: The expected rates of return for Stocks A, B, and C are.10,.15, and .20 respectively. The risk free…

A: Expected returns of each stock:A: 0.10B: 0.15C: 0.20Risk free rate: 0.03Risk premium: 0.08Investment…

Q: You invest in a portfolio of 5 stocks with an equal investment in each one. The betas of the 5…

A: This consists of two parts: In the first part we need to calculate the beta of the portfolio. In the…

Q: Consider a portfolio that offers an expected rate of return of 13% and a standard deviation of 20%.…

A: Given, Expected Rate of Return = 13% Standard Deviation = 20% T-Bill rate of return = 4% We will use…

Q: The beta on risky asset A is 1.8 and the beta on risky asset B is 1.1. The expected return on the…

A: As Capital Asset pricing Model hold good, Expected Return of Stock = Risk Free rate + (market rate…

Q: Stock Y has a beta of 1.45 and an expected return of 13.50 percent. Stock Z has a beta of .70 and an…

A: In this question  we are given expected returns and beta of two stocks i.e. Stock Y and Stock Z and…

Q: Suppose an investor uses two stocks A and B to build a risky portfolio. The following information is…

A: The optimum portfolio is a combination of different risk assets that provide minimum risk and…

Q: An investors invests in a combination of the market portfolio and the risk-free asset. The expected…

A:

Q: ssume CAPM holds. What is the correlation between an efficient portfolio and market portfolio? a. 1…

A: CAPM states that the minimum required return on the asset is the risk free return plus the risk…

Q: What is the beta for the other stock in your portfolio? What is the expected return of the risk-free…

A: Portfolio is the collection of securities or investments. It is the collection of securities…

Q: Consider two types of assets: market portfolio (M) and stock A. The expected return is 8% and…

A: Given: Market rate = 8% Risk free rate = 2% Standard deviation of market portfolio = 15% Standard…

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

A: optimal risky portfolio defines the higher return on the risk basis using the Sharpe ratio including…

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.