Investments
Investments
11th Edition
ISBN: 9781259277177
Author: Zvi Bodie Professor, Alex Kane, Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 6, Problem 29PS

a.

Summary Introduction

To identify: Proportion of y in passive portfolio.

Introduction: Passive portfolio refers to the creation of portfolio where the investor makes a long term investment in the securities and affected by the short term fluctuation.

b.

Summary Introduction

To calculate: The fee that make the client indifferent between fund and passive strategy.

Introduction: Sharpe ratio measure the extra reward per unit of risk. Investor seeks larger Sharpe ratios to maximize their return for the risk they take.

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