You have $20,000 available to invest in two securities A and B and a one-year investment horizon. Security A has an expected return of 10% and a standard deviation of 30% while security B has an expected return of 5% and a standard deviation of 20%. If the returns on these securities are perfectly negatively correlated, the expected return of the minimum variance portfolio is closest to: A. 6.67%. B. 7.00%. C. 8.00%. D. 8.33%.

Q: You are going to invest in Asset J and Asset S. Asset J has an expected return of 13.6 percent and a…

A: ParticularsExpected ReturnStandard DeviationAsset J13.6%54.6%Asset S10.6%19.6%Correlation between…

Q: Asset Y has a standard deviation of 20% and a correlation with the market of .65. Asset Z has a…

A: Beta of a stock= Correlation between stock and market*Standard deviation of stock /Standard…

Q: Assume that the short-term risk-free rate is 3%, the market index S&P500 is expected to pay returns…

A: To calculate expected return CAPM is used. CAPM stands for capital asset pricing model.

Q: You are going to invest in Asset J and Asset S. Asset J has an expected return of 10.8 percent and a…

A:

Q: beta and expected return

A: : Beta refers to the measurement of stock movement in relation to the overall market. A beta greater…

Q: 3. Consider assets A and B with expected returns of E(RA)=12% and E(RB)=20% and standard deviations…

A: Expected return of A=E(Ra) = 12% Expected return of B = E(Rb) = 20% Standard deviation of A = SDa =…

Q: s NOT correlated with the S&P500. Asset B pays on average 8%, also has standard deviation equal to…

A:

Q: What is the expected return of a portfolio that has $8,000 invested in S and $2,000 invested in T?…

A: The expected return of the portfolio can be calculated as:E(R_p) = R_f + β_p * (E(R_m) -…

Q: Assume that the short-term risk-freerate is 3%, the market index S&P500 is expected to pay returns…

A: In order to compute expected return capital asset pricing model is used. The formula to compute…

Q: Consider an investment for which the expected returns are normally distributed with an expected…

A:

Q: An Investor has access to a set of N securities (where N is large). Each of them has an annual…

A: A group of financial assets such as stocks, bonds, commodities, cash, and cash equivalents, as well…

Q: A portfolio has a variance of .0139, a beta of 1.13, and an expected return of 13.93%. What is the…

A: Sharpe ratio  is computed by following formula:-Sharpe ratio = whereRp=  expected return of…

Q: The risk free rate is 4% and the expected rate of return on the market portfolio is 10%.  A.…

A: Risk-free rate = 4% Expected rate of return on market = 10%  The required rate of return on security…

Q: You manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 36%.…

A: Given, Expected return = 17% Standard deviation = 36% T-bill rate = 6%

Q: risk-averse investor is interested to know the Sharpe ratio of the portfolio to make an investment…

A: Risk-free rate = 2.5%Portfolio standard deviation = 5% Market return = 10%Portfolio' expected return…

Q: You are constructing a portfolio of two assets. Asset A has an expected return of 12 percent and a…

A: Sir If you got the answer, please give a helpful rate. Thank you

Q: security A and B is 0.25. The risk free rate is 3%. The weight of security A in the tangency…

A: Risk and return are essential financial principles. The term “risk” refers to the uncertainty and…

Q: Suppose you invest 3/4 of your funds in security A and 1/4 in B. Mean returns for A and B are 16%…

A: Standard Deviation is the measure of variation from the random variations from the return.

Q: You are considering investing $1,000 in a complete portfolioin a T - bill that pays a rate of return…

A: A portfolio is an assortment or mixture of investments, cash, stocks, bonds, and other financial…

Q: A portfolio has an expected return of 16.78% and a variance of 1.03%. If the risk-free rate is…

A: The Sharpe ratio refers to the return of the portfolio that is adjusted for risk to determine the…

Q: For the upcoming year, the risk-free rate is 2 percent, and the expected return to the market is 7…

A: Given the following informationThe risk-free rate is 2%The expected return on the market is 20%The…

Q: You are constructing a portfolio of two assets, Asset A and Asset B. The expected returns of the…

A: To address this question initially, we must calculate the weight of each asset using the following…

Q: The risk-free rate is 7% and the expected rate of return on the market portfolio is 11%. a.…

A: > Given that;> Risk free rate is 7%> Market return is 11%> The value of beta is 1.92

Q: You are constructing a portfolio of two assets, Asset A and Asset B. The expected returns of the…

A: The obtained results are provided below after taking into consideration of step 2

Q: An investor wants to design a complete portfolio with an expected rate of return of 15% from two…

A: Portfolio return, risk and the optimal portfolio: The portfolio return is the sum of the products of…

Q: You are going to invest in Asset J and Asset S. Asset J has an expected return of 14.2 percent and a…

A: Here, Expected ReturnStandard DeviationAsset J14.20%55.20%Asset S11.20%20.20%Correlation0.5

Q: The expected return for Asset Y is 24%, and it has a standard deviation of 14%. The expected return…

A: Standard deviation is one of the measure of risk. Less the standard deviation , less risky the asset…

Q: I. Consider the following information about K oll and Nell for one-time period: Suppose that the…

A: The first part of the question is asking for the expected return and standard deviation of a…

Q: (Expected return and risk) Universal Corporation is planning to invest in a security that has…

A: a. The expected rate of return on the investment is 8.75%.b. The standard deviation of the returns…

Q: A portfolio combines two assets: X and Y. The proportion of Asset X in the portfolio is 35%, and the…

A: A portfolio consists of two or more financial securities. The financial securities in a portfolio…

Q: You are constructing a portfolio of two assets, Asset A and Asset B. The expected returns of the…

A: To solve this question first, we need to compute weight of each asset by using the following…

Q: For the upcoming year, the risk-free rate is 2 percent, and the expected return to the market is 7…

A: To calculate the standard deviation of the resulting portfolio, we need to use the formula for…

Q: Security A has a standard deviation of 10%. Security B . What is the covariance between the two…

A: We need to compute covariance and standard deviation as desired. Standard deviation of portfolio =…

Q: ecurity A has an expected return of 12.4% with a standard deviation of 15%, and a correlation with…

A: CAPM gives the risk adjusted performance of the company and it tells how much rate of return…

Q: This question requires you to consider a three-asset portfolio valued at 10 million AUD. The…

A: Step 1:To address the question related to the three asset portfolio,we will need to go through a few…

Q: You are going to invest in Asset J and Asset S. Asset J has an expected return of 13.6 percent and a…

A: AssetsExpected returnStandard deviationS13.6%54.60%J10.6%19.60%Correlation coefficient = 0.50To…