Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1) Therisk-free rate is 4 % and the expected return on the market is 9.1 %. What is the Treynor Index for themarket? 2) The

1) Therisk-free rate is 4 % and the expected return on the market is 9.1 %. What is the Treynor Index for themarket?

2) The value of the shares in theS&P 500 index is $ 12.28 trillion. Apple Inc. is the largest company in the indexit is worth $ 547 billion. If you want to build a portfolio that earns the same return as theS&P 500, what is the portfolio weight onApple?

3) True orfalse? UnderSharpe's model, all investors hold the market portfolio.

For this question, I think it is true but I would like to double check.

4) You want to build a two asset portfolio including SPDRs andT-Bills that has an expected return of 8.42 %. A SPDR is a Standard andPoor's Depositary Receipt. A SPDR is an exchange traded fund(ETF) that is designed to generate the same return as theS&P 500 index. What is the portfolio weight on theT-Bills? Assume that the return on theT-Bills is 2.0 % and the expected return on theS&P 500 is 8.0 %..

I need help with these short questions. Please show calculations, thank you.

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

Entrepreneurial Finance

Authors: J. Chris Leach, Ronald W. Melicher

6th edition

1305968352, 978-1337635653, 978-1305968356

More Books

Students also viewed these Finance questions