What's the sharp ratio

Q: Assume the CAPM holds. You are holding a portfolio with the beta of 0.9 and the standard deviation…

A: Risk-free rate, Rf = 3.5%Market return, Rm = 10%Market standard deviation, Sm = 16%Portfolio Beta, B…

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: Assume that the CAPM is true, ?F = 5%, ?M = 15% ??? ?M = 0.1. An investor with $10,000 to invest…

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Q: Consider that an investor has a total of £300,000 to invest. The investor invested £200,000 in asset…

A: Portfolio standard deviation formula: Value at Risk is calculated by standard deviation of…

Q: If you perform a NPV analysis on a perspective investment using a "d" = 15% and:       a. the…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: The investor has R60,000 to invest. R15,000 will be invested into the market portfolio, R10,000 into…

A: Beta shows the risk related to overall market risk and it show that how stock is sensitive to the…

Q: You're considering purchasing Proctor and Gamble Stock. Suppose the risk-free interest rate is 5.0%…

A: If CAPM hold good, Expected Return on Stock =  Risk Free rate + (Market Rate of Return -Risk Free…

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

A: It represents the inflow amount and outflow amount of the firm. The amount obtained by the firm…

Q: A real estate investor has the opportunity to purchase land currently zoned as residential. If the…

A: The probability (P) of approval is 50%. The given profits under the alternative of Purchase (d1) for…

Q: 2. A local bank is offering a promotional deal where if you open a bank account for at least $1000,…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: There is one investment and there are two different two probabilities. If the investment is in bust…

A: Given: Bust probability = 50% Expected return in bust = $100 Boom probability = 50% Expected return…

Q: Consider the following investment: A portfolio that pays a 30% rate of return with a probability of…

A: Variables in the question:         Probability      Rate of Return60%30%40%15%Investment in…

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: 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: 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: You want to create a portfolio equally as risky as the market, and you have $1,500,000 to invest.…

A: Total investment=$15,00,000Investment in A=$3,00,000Investment in B=$22,5000

Q: The Treasury bill rate is 3.1%, and the expected return on the market portfolio is 10.2%. Use the…

A: According to CAPM model: rate of return =risk free rate+beta ×market return - risk free rate

Q: a. What is the beta of the investor's portf b. What amount has the investor placed in portfolio B?…

A: "As you have asked questions with multiple subparts, According to honoring guidelines we will answer…

Q: Suppose you have $20,000 available to invest and the risk-free rate, as well as your borrowing rate,…

A: The complete portfolio is a combination of a risky portfolio and a risk-free asset with moderate…

Q: You expect your portfolio's return will be 8%,2% and −4% if the economy turns out to be great, fair…

A: The expected return is the return that an investor expects on his portfolio on the basis of…

Q: A client wants to invest 44% of her money in a portfolio of risky assets and the rest in Treasury…

A: Standard deviation of portfolio comprising of 2 securities is calculated as follows:-SDp =whereSDp…

Q: otal return= 10% with profitability 50% total return= 20% with…

A: The expected return is derived by dividing the number of possible outcomes (yields) by the…

Q: Consider a security with a beta of 1.2, when the market risk premium is 5%, and the risk-free rate…

A: The capital asset pricing model (CAPM) refers to a model which calculates the required return, or…

Q: You estimate that the expected return of your portfolio is 30%. The standard deviation of the return…

A: z value = (-20 - 30)/25 = -2 so the probability = (100% - 95.44%)/2 = 2.28%

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

A: Answer:The present value of the portfolio is $118,421Calculation of expected cash flows:With the…

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: The return on the market is 10.5% and the risk-free rate is 2.90%. The investor is conservative and…

A: CAPM refers to capital asset pricing model.  This model shows the relationship between systematic…

Q: Consider an investment whose annual return is normally distributed with a mean of 6% and a standard…

A: A typical risk management metric in the banking sector is value at risk, or VAR. Value at Risk is a…

Q: You have been given the following information: The required return of the market is 14.5% The risk…

A: This question has two parts. In the 1st part we need to Calculate the required rate of return. In…

Q: vestor has R50,000 to invest A, B and C. R12,000 will be invested into asset A. The beta for asset A…

A: Beta of portfolio is the weighted beta of individual beta of the stocks in the portfolio and beta…

Q: If the return on the risk-free asset is 2.25% (Rf = 2.25%) and the market return is 6.50% (Rm =…

A: Beta shows magnitude of systematic risk related to stock. It shows volatility in stock returns over…

Q: The investor has R60,000 to invest. R15,000 will be invested into the market portfolio, R10,000 into…

A: Portfolio beta is the weighted sum of the beta of individual securities in the portfolio.It measures…