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allochka39001 [22]
3 years ago
10

You invest $1,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return o

f 16% and a standard deviation of 20% and a Treasury bill with a rate of return of 6%, what proportion ofyour $1,000 investment should be invested into theriskyasset and what proportion into the Treasury bill if you want your portfolio to have an expected value of $1,100 in 1 year? What will be the resulting standard deviation of your complete portfolio?
Business
1 answer:
gladu [14]3 years ago
7 0

Answer:

The rate of return on the risky asset is 16% and on treasury bill is 6% and we need a return of (1100-1,000)/1000= 10% or 0.1

If we think of x as the percentage investment in risky asset and 1-x as the investment in non risky asset we can mathematically find what proportion we need to invest in each asset to get this return.

16x+ 6(1-x)=10

16x+6-6x=10

10x=4

x=4/10

x= 0.4

This equation tells us that we should invest 40% in risky assets and 1-x which is 60% in treasury bills. We can test our answer by putting these values and see if the return is 10 %

(0.4*16)+(0.6*6)= Rate of return

Rate of return=10%

10% of 1000 = 100

100+1000=$1100

Explanation:

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Mademuasel [1]

Answer:

The correct option is 2

Explanation:

Let us assume the current value of the investment be x

And the annual growth factor of the investment is 1.2

1. The  investment value has increased or risen by 44% since it was first made

It is known that the combined growth factor of the investment is 1.44 and no information is stated regarding the actual ($) values. Therefore, the unique value could not be computed.

So, this statement lacks information and insufficient to solve for x.

2. 1 year ago, the withdrawn money worth is $600 and at present the worth of the investment would be 12% less than the actual worth.

1 year ago, the value of the investment was x / 1.2. So, the equation could be set up regarding the withdrawal.

The equation would be:

= (x/ 1.2- 600) × (1.2)

=0.88x

Therefore, the unique value to could be answered and the sufficient to answer.

NOTE: The options are missing. So I am providing the answer with the options.

4 0
3 years ago
Shear-it, Inc., produces paper shredders. Shear-it is considering a new shredder design for home offices. The marketing vice pre
stira [4]

Answer:

$49

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8 0
3 years ago
Janet and Chrissy want to move into an apartment near their school. They have agreed to divide all costs equally. They plan to u
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Answer: $1147.50

Explanation:

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Broker's charge = 20% of first month fee

Security deposit = 1.5 months rent

Therefore,

Broker's fee = 20% × $850

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Security deposit = 1.5 × $850 =$1275

Total fee = $850 + $1275 + $170 = $2295

Since Chrissy and Janet are sharing the fee equally:

Janet's share :

50% of $2295 = $1147.50

3 0
3 years ago
A bakery sold apple pies for $11 and blueberry pies for $13. one saturday they sold a total of 38 pies and collected a total of
Nimfa-mama [501]
So first you know that if a is apple pies and b is blueberry that
$460=11a+13b in terms of price and you also know that the number
a+b=38
I solved that for either a or b (I chose a)
So
A=38-b
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460=11(38-b)+13b
460=418-11b+13b
460=418+2b
42=2b
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Therefore you can do 38(total pies)-21(what b equals) to find the apple pies which would be 17 so a=17
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5 0
2 years ago
Read 2 more answers
You just won $90,000 on a scratch-off lottery ticket. You plan to save the money in a retirement account expected to return 6% p
yanalaym [24]

Answer:

  about 1.24 million dollars

Explanation:

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