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Sloan [31]
3 years ago
9

You managed a risky portfolio with an expected rate of return of 28% and a standard deviation of 78%. The T-bill rate is 5%. You

r client stipulates that the complete portfolio's standard deviation should be less than 12%. What proportion of your client's total investment should be invested in the risky portfolio
Business
1 answer:
Dennis_Churaev [7]3 years ago
6 0

Answer:

Portfolio standard deviation = Weight in Risky portfolio * Standard deviation of Risky portfolio

12% = Weight in risky Portfolio * 78%

Weight in risky Portfolio = 12% / 78%

Weight in risky Portfolio = 0.1538

Weight in risky Portfolio = 15.38%

Stock                    Weight     Return      Weighted Return

Risky portfolio      0.1538     28.00%              4.31%

Risk free Asset     0.8462    5.00%                <u>4.23%</u>

Portfolio Return                                              <u>8.54%</u>

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7 0
3 years ago
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Irina-Kira [14]

Answer:

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The operations and accounting for the cost of production of Orange Co. will be different from Pineapple Company's.  The difference is a reflection of their statuses as manufacturer and merchandiser respectively.  Orange Co. manufactures and sells goods while Pineapple Company sell manufactured goods.

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3 years ago
Auto Parts is considering a merger with Car Parts. Car Parts market-determined beta is 0.9, and the firm currently is financed w
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Answer: 9.7%

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= 9.28%

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Total units                       22,660

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Work in process, June 30  2,060 units

Total units                          22,660 units

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