What is the required rate of return on the new portfolio?

Q: Assuming that the pure expectations theory is correct, how are expected short-termrates used to…

A: Pure expectations theory believes that expected future rates can be represented by the forward…

Q: how to calculate the average monthly return for a portfolio

A: The return of the portfolio is the weighted average return of the individual securities held in the…

Q: How can we find Yield to maturity?

A: Yield to maturity (YTM) is the foreseen absolute profit for a bond if the bond holds until due or…

Q: How should inflation expectations be included in analysis of capital projects?

A: Inflation expectations should be included in the analysis of capital projects by factoring in the…

Q: What is the marginal rate of return? How is it calculated?

A: Answer: Marginal rate of return can be defined as the return obtained or received by means of…

Q: What is growth option?

A: Mutual funds have two types of schemes. Growth option and dividend option. Mutual funds having…

Q: Why are the net present value and the internal rate of return models superior to the payback period…

A: The net present value and internal rate of return techniques are superior to the payback method…

Q: what is portfolio load

A: Introduction : In simple words, when an individual or an entity purchase and collect different kinds…

Q: Example or scenario of market portfolio?

A: The question is based on the concept of market portfolio, which  is a bundle of  all the assets…

Q: Discuss the factors to be considered in choosing a preferred portfolio when taking into account the…

A: A portfolio is the combination of various assets with varying returns and risks profile. A well…

Q: How do maturity risk premiums affect the yield curve?

A: A premium, which a borrower pays to the lender in the form of compensation of interest rate…

Q: What are investment returns?

A: Investment returns are a performance measure used to evaluate a speculation’s adequacy or to think…

Q: What is Long-Term Equity AnticiPation Security (LEAPS)?

A: Long-term equity anticipation securities (LEAPS) It's a contract for trading on open market options…

Q: Briefly explain on elements of Modern Portfolio Theory.

A: Modern portfolio theory brings correlation between risk and return for investors.

Q: How duration and convexity can help investors better manage their fixed-income portfolios. Give…

A: Convexity is referred to as the risk management tool, which helps in measuring as well as managing…

Q: Finance Question

A: The additional income earned by a stockholder over the investment amount of stock is term as the…

Q: How does risk affect interest rates?

A: The risk and the interest rates are in a direct relationship that is, the greater the risk the…

Q: What are the benefits and advantages of diversification for a portfolio?

A: Diversification of portfolio means allocating investments to different assets so that there is…

Q: Conceptually, how does an investor choose his or her optimal portfolio?

A: The point where any of the ‘indifference curve’ are tangent to the efficient set of portfolios is…

Q: What is the relation between the expected rate of return and the required rate of return as they…

A: In the world of finance in general and investments in particular we often look at a security’s…

Q: What security provides a good estimate of the short-term nominalrisk-free rate?

A: T-bills are the treasury bills issued by the government. These bills are risk-free and the rate of…

Q: Is the risk-free rate the Treasury yield?

A: The risk-free rate refers to the rate of return on an investment that is having zero risk of loss.…

Q: Which are the Elements of Portfolio Theory?

A: Portfolio theory: The theory of portfolio is about risk and return. The investor is concerned…

Q: What security provides a good estimate of the long-term nominalrisk-free rate?

A: Risk-free Rate is the estimation of the rate that is earned on the securities or the investments…

Q: Discuss the usefulness of collective investments for the fixed income segment of portfolios.

A: The portfolio's fixed income segment consists of those investment securities that pay a fixed…

Q: For 2020, the annual earnings for Eveready Security Equipment were $6,800,000. The corporation has…

A: A ratio that provides information regarding the share price of a company by relating it to the…

Q: What is hedge portfolio?

A: Hedge portfolio It consists of the long position in a security i.e stock and also the long position…

Q: 2. What are the two types of fixed-income portfolio management strategies and why is each used?

A: The portfolio composed of securities resulting in the regular cash flows which will ultimately helps…

Q: how to calculate portfolio beta?

A: Beta is used while calculating the volatility of the investment. It measures the systematic risk of…

Q: Explain Price Return Swap?

A: A derivative contract which enables two parties to exchange financial instruments, cash flows,…

Q: What is the purpose of portfolio management?

A: A portfolio is a systematic method of selection of investment mix to get benefit with a limited risk…

Q: What is the initial investment plus interest?

A: The total of initial investment and interest will give the total value or worth of the investment…

Q: does modern portfolio theory works?

A: MPT or Modern Portfolio Theory is defined as the mathematical framework regarding an assemble of the…

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.