1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
telo118 [61]
3 years ago
5

Treasury bills are paying a 4% rate of return. A risk-averse investor with a risk aversion of A = 1.85 should invest entirely in

a risky portfolio with a standard deviation of 24% only if the risky portfolio's expected return is at least ______.
Mathematics
1 answer:
kumpel [21]3 years ago
8 0

Answer:

14.656%

Step-by-step explanation:

Data provided in the question:

Rate of return, r = 4% = 0.04

Risk aversion of A = 1.85

Standard deviation, σ = 24%

Now,

we have the relation

A = (E - r) ÷ σ²

E = expected return on portfolio

r = Risk free rate

on substituting the respective values, we get

1.85 = (E - 0.04) ÷ (0.24)²

or

0.0576 × 1.85 = (E - 0.04)

or

0.10656 + 0.04 = E

or

E = 0.14656 or

E = 0.14656 × 100% = 14.656%

You might be interested in
Solve the system of linear equations by elimination 2x+7y=1 2x-4y=12
pishuonlain [190]

\left\{\begin{array}{ccc}2x+7y=1\\2x-4y=12&\text{change the signs}\end{array}\right\\\\\underline{+\left\{\begin{array}{ccc}2x+7y=1\\-2x+4y=-12\end{array}\right}\qquad\text{add both sides of equations}\\.\qquad\qquad11y=-11\qquad\text{divide both sides by 11}\\.\qquad\qquad \boxed{y=-1}\\\\\text{Put the value of y to the first equation:}\\\\2x+7(-1)=1\\2x-7=1\qquad\text{add 7 to both sides}\\2x=8\qquad\text{divide both sides by 2}\\\boxed{x=4}\\\\Answer:\ \boxed{x=4\ and\ y=-1\to(4,\ -1)}

3 0
3 years ago
Which is most likely the thickness of a penny when measured with a ruler? A) 0.016 in B) 1.5 mm C) 1.5 cm D) 1.55 mm
olganol [36]
The answer is B 1.5 mm
8 0
3 years ago
Read 2 more answers
Determine which problem matches the given inequality.
sergey [27]

Answer:

There are less than 5 1/2 cups of sugar.

Step-by-step explanation:

E D G E N U I T Y

Have a good day! (◕ヮ◕ヽ)

8 0
3 years ago
Read 2 more answers
What is the value of x in this figure?
crimeas [40]

Answer:

26°

Step-by-step explanation:

x = 90° - 64° = 26°

5 0
3 years ago
What is the value of x that makes the given equation true?<br> X-3x=2(4+x)
Ratling [72]

x - 3x = 2(4 + x)

-2x = 8 + 2x

-4x = 8

x = -2

7 0
3 years ago
Read 2 more answers
Other questions:
  • What is the area of the polygon given below?
    7·2 answers
  • Please help me i'll give 15 points
    14·1 answer
  • Please help like nobody has helped me on my other questions and i dont wanna fail this test
    14·1 answer
  • 72:64=9:_ What is the answer
    13·1 answer
  • Can u guys help me with this problem?
    8·1 answer
  • Simplify the expression below.<br> 13y + x - 7y
    11·2 answers
  • John got a 20% discount at a sale. He got a new shirt for $12. What was the original price of the shirt?
    13·1 answer
  • I need the term plz nd thank u bb ❤
    7·1 answer
  • Help please if your good with volumes of prisms and stuff lol
    5·1 answer
  • Write 34/9 as a decimal. If necessary, use a bar to indicate which digit or group of digits repeats.
    14·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!