You are evaluating two investment alternatives. One is a passive market portfolio with an expected return of 10% and a standard deviation of 16%. The other is a fund that is actively managed by your broker. This fund has an expected return of 15% and a standard deviation of 20%. The risk-free rate is currently 7%. What is the maximum fee (expense ratio) your broker could charge and still leave you as well off as if you had invested in the passive market fund? (Assume that the fee would be a percentage of the investment in the broker's fund, and would be deducted at the end of the year.)
 Group of answer choices 5.00% 4.25% 3.00% 6.33% None of the above.

The project for this semester is about putting a portfolio together. The portfolio will be based on: Asset allocation Beta/Standard Deviation Valuations Return To make this project about performance only would encourage gambling in the stock and bond markets and that is not what we are here to do. We are here to make fundamentally sound investments with the tools we have in this course. Therefore, please put a portfolio together of any investments you would like using different types of mutual funds; large cap, mid cap and small cap, growth and/or value, international, domestic, emerging markets. Bonds; investment grade, high yield or emerging market. I recommend mutual funds as the risk analytics are easier to find. Any asset allocation you want and explain why you like the allocation. Illustrate a 3, 5, 7 and 10 year performance of the portfolio with the beta and standard deviation. We are looking at risk adjusted returns. Clearly making 10% is better than making 8%…

(b) Build a spreadsheet model and solve the problem using Solver. What is the recommended investment portfolio for this client? Internet Fund = $ Blue Chip Fund = $ What is the annual return for the portfolio? (c) Suppose that a second client with $50,000 to invest has been classified as an aggressive investor. B&R recommends that the maximum portfolio risk rating for an aggressive investor is 340. What is the recommended investment portfolio for this aggressive investor? Internet Fund = $ Blue Chip Fund = $ Annual Return = $ (d) Suppose that a third client with $50,000 to invest has been classified as a conservative investor. B&R recommends that the maximum portfolio risk rating for a conservative investor is 150. Develop the recommended investment portfolio for the conservative investor. If an amount is zero, enter "0". Internet Fund = $ Blue Chip Fund = $ Annual Return = $

You have estimated the single index model (SIM) fund B and found that its alpha and beta are 0.035 and 1.1 respectively. The standard deviation of Fund B's excess returns is 30% and the market portfolio excess returns have a standard deviation of 20%. What's the information ratio of Fund B?