a. What is the standard deviation of your portfolio? (Round your answer to 2 decimal places.) Standard deviation b. What is the proportion invested in the money market fund and each of the two risky funds? (Round your answers to 2 decimal places.) Money market fund Stocks Bonds Proportion Invested
Q: You want to create a portfolio equally as risky as the market, and you have $2,700,000 to invest.…
A: In equity market, risk is measured by beta. Beta represents the sensitivity of the stock return with…
Q: LuSE (Lusaka Securities Exchange) has been voted as one of the top 10 best performing securities…
A: The performance of securities markets in Africa can be evaluated based on various factors, such as…
Q: A transport company intends to periodically renew its fleet. . The new vehicle costs Cr$100,000.00…
A: ParticularsValuesCost of New Vehicle $ 100,000.00Exponential Depreciation20%jury tax10%YearCost1 $…
Q: You own a portfolio with the following expected returns given the various states of the economy.…
A: Expected return refers to the probability of expected return from all the scenarios.
Q: W As a consultant to Basso Inc., you have been provided with the following data: D, 50.67:…
A: To arrange the funds for the new investments or operations, firm offered various securities like…
Q: In mid-2012, Ralston Purina had AA-rated, 10-year bonds outstanding with a yield to maturity of…
A: AA-rated bond -AA denotes high safety bonds i.e., such bonds have very low risk or no risk of…
Q: Assume the Knight Corporation is considering the acquisition of Day Inc. The expected earnings per…
A: Expected earnings per share=$3Pre-merger standard deviation=$2.55Post-merger standard…
Q: Assume a firm increases its revenue by $148 while increasing its cost of goods sold by $117. How…
A: Increase in Revenue = $148Increase in Cost of Goods Sold = $117Marginal Tax rate = t = 21%
Q: 1. You want to buy a Toyota Prius on your 27th birthday. You have priced these cars and found that…
A: An annuity refers to a financial contract in which an individual or organization pays a specific sum…
Q: Suppose Woolworths has a beta of 0.79 and Qantas has a beta of 1.51. The risk- free interest rate is…
A: In the given case, we have provided the Betas , risk free rate ,market risk premium and the weights…
Q: 3. The correlation coefficients between pairs of stocks are as follows: Corr(W,X)=0.40,…
A: As per the given information;Correlation coefficients between pairs of stocks :
Q: Consider two companies: Honda and IBM. Honda wants to borrow US$ for the following 5 years at a…
A: A currency swap is an agreement between two parties in which they agree to pay the interest rate on…
Q: Brandt Enterprises is considering a new project that has a cost of $1,000,000, and the CFO set up…
A: >Please refer to the below spreadsheet for calculation and answer. Cell reference was also…
Q: b) What are the objectives of financial statements? Prepare the balance sheet from the following…
A: We are Given the following trial balances:Required: Explain the objectives of financial…
Q: Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par…
A: Percentage change in the price of a bondWith initial price (X) and final price (Y), the percentage…
Q: Your firm needs a computerized machine tool lathe which costs $50,000 and requires $12,000 in…
A: Depreciation tax shield refers to the tax savings that a company receives due to the tax-deductible…
Q: E(rs) 10 eight in stocks WS -0.1 0.0 0.1 0.2 0.3 0.4 0.6 0.8 1.0 1.1 E(1 B) 5 Portfolio expected…
A: First, I'm going to list the formula used and then solve them in excel. Portfolio expected return =…
Q: The delta and gamma of the portfolio held by an option dealer are + 178 and -322, respectively. The…
A: Delta and gamma are two important measures used in options trading to assess the sensitivity of the…
Q: ← Yin Li deposited $200.00 into a savings account that compounded interest quarterly What nominal…
A: Rate of interest refers to an expense that is being charged by the lender form the borrower in…
Q: Motoguzzie (A). Motoguzzie exports large-engine motorcycles (greater than 700cc) to Australia and…
A: The potential return or advantage that could have been realized through a different investment or…
Q: Q2. Consider 3 zero coupon bond: Maturity Yld 5 1.50% 10 1.75% 20 2.25% Q2a. calculate…
A: Bond Convexity refers to relation between the bond price and bond yields. It is used to measure…
Q: Use the below information to answer the following question Sales (1,000 units) Variable costs…
A: Degree of Operating Leverage:It measures the change in the operating income in response to the…
Q: Market performance over the upcoming year (select one): Fantastic Return Good Return Flat Poor…
A: The future value refers to the value of an investment or asset at a specific point in the future,…
Q: You are arranging a $356,000 Canadian mortgage with a 25-year amortization period and a 6.7% posted…
A: Monthly mortgage payment refers to an amount that is paid at every month for the repayment of loan…
Q: X an indian company wishes to borrow usd at fixed rate. Y, a us company wishes to borrow in indian…
A: Swaps are contracts in which two parties exchange financial instruments or cash flows. They are…
Q: 8. If the CAPM is valid, is the following situation possible? Portfolio A B Expected Return 5% 40%…
A: Capital Asset Pricing Model determines the expected return of a stock as a function of beta…
Q: 2. Using a scientific calculator, find the monthly payment that must be made for 3 years to attain…
A: Time, value of money refers to the concept that describes the money present today is more valuable…
Q: Consider Pacific Energy Company and U.S. Bluechips, Inc., both of which reported earnings of…
A: P/E ratio is one of the important ratios being used in business. This is also known as the…
Q: Use the average daily balance method to compute the finance charge on the credit card account for…
A: Previous month Balance = $550April 11 - Purchase = $36April 14 - Payment = $80April 22 - Purchase =…
Q: Your parents contribute $180 monthly to a college savings plan for you that earns 5.4% compounded…
A: Annuity is that amount under which investor will pay the equal amount for a specified period of time…
Q: Problem 10-10 Calculating Real Returns and Risk Premiums [LO 1] You've observed the following…
A: Variables given in the question:YearReturn (%)1-26.7214.8332.642.9521.9Average inflation rate over…
Q: Assume there are two firms with a MV of $50,000,000. Firm A consists of 10% debt and 90% equity.…
A: Given details are:Two firms with a market value of $50MN each.Firm A: 10% debt, 90% equityFirm B:…
Q: Can you solve it in an Excel spreadsheet? because something is wrong with the asnwer. tyhank you,
A: Bonds are debt instruments issued by companies.The issuing company pays coupons to the bond holders…
Q: Question 3 Simpson Ltd is an engineering company and is currently considering whether to accept one…
A: Capital budgeting techniques are-NPV is Net present value is commonly used techniques in which…
Q: Calculate a security’s default risk premium where the equilibrium rate of return is 8 percent, the…
A: Equilibrium Return for a security is minimum return that a security must earn to overcome all the…
Q: Assume that in January 2013, the average house price in a particular area was $280,400. In January…
A: As per Bartleby guidelines only one question can be solve at a time in multiplier questions. Please…
Q: A price level adjusted mortgage (PLAM) is made with the following terms: Amount = $95,200 Initial…
A: Here,Loan Amount is $95,200Interest Rate is 4%Inflation Rate is 6%Points is 6%Term of Loan is 30…
Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…
A: For calculating weights, first we'll have to calculate Covariance of stock and bondCovariance of…
Q: Calculate the default risk premium for a security with equilibrium rate of return of 8 percent, an…
A: The expected or necessary rate of return on an investment that would cause the market to be in…
Q: Your brother is considering the purchase of a home rather than renewing the lease on his two-bedroom…
A: Monthly mortgage refers to an amount that is paid at every month for the repayment of total mortgage…
Q: Purchase price Number of years held Sale price Annual dividend (PO) (n) (P1) (Div) (P1+ Div / PO) 1…
A: An investor may be sitting on a profit on their investment at any point in time. Until the investor…
Q: Think about the factors at both global and U.S. levels that may affect the liquidity of banks. List…
A: Factors at both global and U.S. levels can have an impact on the liquidity of banks. When regulatory…
Q: Suppose that oil forward prices for 1 year, 2 years, and 3 years are $109, $128, and $134 per…
A: Swap price refers to the price used for a derivative contract while valuing one asset for another…
Q: The cc risk free rate r = -0.15% (yes, r < 0). The spot price for TFS is So = 42.50, the cc dividend…
A: As per the given information:To determine:Replicating portfolio at the node t=0, S=S0 for a…
Q: Blossom Company is considering buying a new farm that it plans to operate for 10 years. The farm…
A: NPV is also known as Net Present Value. It is a capital budgeting techniques which help in decision…
Q: You are hurt in a car accident and your lawyer wins a $100,000 settlement to be distributed as…
A: Present value represents the current worth of the future sum of amount or future stream of cash…
Q: Lush Gardens Co. bought a new truck for $50,000. It paid $5,500 of this amount as a down payment and…
A: The cost of new truck is $50,000The down payment is $5,500The interest rate is 4.16% compounded…
Q: Give complete solutions and draw a cashflow diagram. Provide an amortization schedule 1. You have a…
A: A loan amortization schedule shows the amortization of a loan over the term period by presenting the…
Q: A company purchases an industrial laser for $123,000. The device has a useful life of 4 years and a…
A: After tax cash flow can be determined by deducting depreciation and taxes from the operating cash…
Q: Consider the following table of annual rates of return, in percentage, for four common risky assets…
A: As per the mean-variance portfolio theory, the investment decisions made by the investor should be…
Step by step
Solved in 3 steps with 2 images
- 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 4%. The characteristics of the risky funds are as follows: Expected Return Standard Deviation Stock fund (S) Bond fund (B) The correlation between the fund returns is 0.09. You require that your portfolio yield an expected return of 14%, and that it be efficient, that is, on the steepest feasible CAL. 17% 14 35% 18. Required: a. What is the standard deviation of your portfolio? b. What is the proportion invested in the money market fund and each of the two risky funds?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 4%. Thecharacteristics of the risky funds are as follows: The correlation between the fund returns is 0.13. Yourequire that your portfolio yield an expected return of 12%, and that it be efficient, that is, on the steepestfeasible CAL. a. What is the standard deviation of your portfolio? (Round your answer to 2 decimal places.)Standard deviation b. What is the proportion invested in the money market fund and each of the two riskyfunds? (Round your answers to 2 decimal places.)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 21% 13 The correlation between the fund returns is 0.13. You require that your portfolio yield an expected return of 11%, and that it be efficient, that is, on the steepest feasible CAL. Required: a. What is the standard deviation of your portfolio? b. What is the proportion invested in the money market fund and each of the two risky funds? Required A Standard Deviation 36% 22 Complete this question by enter your answers in the tabs below. Required B Money market fund Stocks Bonds What is the proportion invested in the money market fund and each of the two risky funds? Note: Round your answers to 2 decimal places. Proportion Invested % % %
- 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 4%. The characteristics of the risky funds are as follows: Stock fund (S) Bond fund (B) Expected Return 24% 12 The correlation between the fund returns is 0.13. Standard Deviation You require that your portfolio yield an expected return of 12%, and that it be efficient, that is, on the steepest feasible CAL. Required A Required: a. What is the standard deviation of your portfolio? b. What is the proportion invested in the money market fund and each of the two risky funds? 30% 19 Complete this question by entering your answers in the tabs below. Required B Money market fund Stocks Bonds What is the proportion invested in the money market fund and each of the two risky funds? Note: Round your answers to 2 decimal places. Proportion Invested % % %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 4%. The characteristics of the risky funds are as follows: Stock fund (S) Bond fund (8) Standard deviation Expected Return Standard Deviation 19% 10 The correlation between the fund returns is 0.11. You require that your portfolio yield an expected return of 12%, and that it be efficient, that is, on the steepest feasible CAL. a. What is the standard deviation of your portfolio? (Round your answer to 2 decimal places.) Money market fund Stocks Bonds b. What is the proportion invested in the money market fund and each of the two risky funds? (Round your answers to 2 decimal places.) 34% 18 Proportion Invested % % %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 4%. The characteristics of the risky funds are as follows: Expected Return Standard Deviation 234 14 294 17 Stock fund (5) Bond fund (8) The correlation between the fund returns is 0.12. You require that your portfolio yield an expected return of 12%, and that it be efficient, that is, on the steepest feasible CAL a. What is the standard deviation of your portfolio? (Round your answer to 2 decimal places) Standard deviation b. What is the proportion invested in the money market fund and each of the two risky funds? (Round your answers to 2 decimal places.) Money market fund Stocks Bonds Proportion Invested *** Check my work
- 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 24% 14 The correlation between the fund returns is 0.14. Standard Deviation You require that your portfolio yield an expected return of 16%, and that it be efficient, that is, on the steepest feasible CAL. Required A Required: a. What is the standard deviation of your portfolio? b. What is the proportion invested in the money market fund and each of the two risky funds? 33% 22 Complete this question by entering your answers in the tabs below. Required B Money market fund Stocks Bonds What is the proportion invested in the money market fund and each of the two risky funds? Note: Round your ar vers to 2 decimal places. Proportion Invested % %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 21% 12 Standard Deviation 28% 18 The correlation between the fund returns is 0.09. Sharpe ratio What is the Sharpe ratio of the best feasible CAL? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 4 places.)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 24% 14 Standard Deviation 33% 22 The correlation between the fund returns is 0.14. You require that your portfolio yield an expected return of 16%, and that it be efficient, that is, on the steepest feasible CAL. Required: a. What is the standard deviation of your portfolio? b. What is the proportion invested in the money market fund and each of the two risky funds? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below.
- 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 8%. The characteristics of the risky funds are as follows: Stock fund (5) Bond fund (D) Expected Return 20% 12 The correlation between the fund returns is 0.10. You require that your portfolio yield an expected return of 14%, and that it be efficient, that is, on the steepest feasible CAL a. What is the standard deviation of your portfolio? (Round your answer to 2 decimal places.) T-bill fund Stocks Bonda Standard Deviation 30% 15 Standard deviation 13.92% b. What is the proportion invested in the money market fund and each of the two risky funds? (Round your answers to 2 decimal places.) Proportion InvestedA 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% 12A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 6%. The probability distribution of the risky funds is as follows: E(r) st. dev. stock fund .24 .33 bond fund .14 .22 The correlation between the fund returns is 0.14. You require that your portfolio yield an expected return of 16%, and that it be efficient, on the best feasible CAL. a. What is the standard deviation of your portfolio? (Round your answer to 2 decimal places.) b. What is the proportion invested in the T-bill fund and each of the two risky funds? (Round your answers to 2 decimal places.)