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%
Answer:
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Answer:
y = 1/2x - 4
Step-by-step explanation:
If two lines are perpendicular to each other, they have opposite slopes.
The first line is y = -2x + 8. Its slope is -2. A line perpendicular to this one will have a slope of 1/2.
Plug this value (1/2) into your standard point-slope equation of y = mx + b.
y = 1/2x + b
To find b, we want to plug in a value that we know is on this line: in this case, it is (4, -2). Plug in the x and y values into the x and y of the standard equation.
-2 = 1/2(4) + b
To find b, multiply the slope and the input of x (4)
-2 = 2 + b
Now, subtract 2 from both sides to isolate b.
-4 = b
Plug this into your standard equation.
y = 1/2x - 4
This equation is perpendicular to your given equation (y = -2x + 8) and contains point (4, -2)
Hope this helps!
