The numerical value of the proportion of the each asset and expected return along with the standard deviation of the optimal risky portfolio. Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment. The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance. s t a n d a r d d e v i a t i o n = v a r i a n c e The expected return is defined as the return which is obtained on the risky asset that is expected in future.

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Answer 1

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Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

Chapter 7, Problem 7PS

Summary Introduction

To calculate: The numerical value of the proportion of the each asset and expected return along with the standard deviation of the optimal risky portfolio.

Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment.

The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance.

standard deviation=variance

The expected return is defined as the return which is obtained on the risky asset that is expected in future.

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A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term bond fund, and the third is a money market fund that provides a safe return of 7%. The characteristics of the risky funds are as follows: Expected Return Standard. Deviation Stock fund (S) 32% Bond fund (B) 19 The correlation between the fund returns is 0.11. Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. Note: Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places. 22% 12

A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term bond fund, and the third is a money market fund that provides a safe return of 9%. The characteristics of the risky funds are as follows: Stock fund (S) Bond fund (B) Expected Return 19% 12 Standard Deviation 32% 15 The correlation between the fund returns is 0.11. Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.) Portfolio invested in the stock Portfolio invested in the bond Expected return Standard deviation

A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term bond fund, and the third is a money market fund that provides a safe return of 6%. The characteristics of the risky funds are as follows: Stock fund (S) Bond fund (B) Expected Return 16% 12 Standard Deviation 35% 15 The correlation between the fund returns is 0.13. Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.)

Answer 2

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Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

Chapter 7, Problem 7PS

Summary Introduction

To calculate: The numerical value of the proportion of the each asset and expected return along with the standard deviation of the optimal risky portfolio.

Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment.

The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance.

standard deviation=variance

The expected return is defined as the return which is obtained on the risky asset that is expected in future.

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Check out a sample textbook solution

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Answer 3

Question

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

Chapter 7, Problem 7PS

Summary Introduction

To calculate: The numerical value of the proportion of the each asset and expected return along with the standard deviation of the optimal risky portfolio.

Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment.

The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance.

standard deviation=variance

The expected return is defined as the return which is obtained on the risky asset that is expected in future.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

Chapter 7, Problem 7PS

Summary Introduction