Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. A condpeutave portitio has an espoceed return of 6.25 and samdard deviation of scerion Ci Calcutation Troblicars 7.5e. T. Bills has a return of

image text in transcribed
1. A condpeutave portitio has an espoceed return of 6.25 and samdard deviation of scerion Ci Calcutation Troblicars 7.5e. T. Bills has a return of 356 and standard deviation of 0%. Dow Jones ladex has an expected retum of 10%5 and standard deviation of 15%. If you are willing to make your own portfolio with a standard deviation of 8%, the portfolio consists of raky and risk-free asset. a. What is the weight in the risky asset and the risk free usset? [2 marks] b. What is the expected return of your portolio? [2 marks| c. If you want to decrease your portfolio risk, would you suggest to increase or decrease your weight in T.Bills. [2 marks]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

An End To The Bull Cut Through The Noise To Develop A Sustainable Trading Career

Authors: Gary Norden

1st Edition

0730311449,0730311473

More Books

Students also viewed these Finance questions