Question
1. Youd like to construct a safe portfolio and decide to invest 75% of your money into Canadian Tbills yield 4%, the rest is invested
1. Youd like to construct a safe portfolio and decide to invest 75% of your money into Canadian Tbills yield 4%, the rest is invested in an S&P 500 ETF that has an expected return of 20% and standard deviation of 9%.
A. What is the expected return of your portfolio?
B. What is the standard deviation of your portfolio?
2. You have $5,000 an invest all of it into Stock A which is expected to earn 10% with a standard deviation of 8%. You borrow another $5,000 at the risk free rate of 3% and invest that into Stock A as well.
C. What is the expected return of your portfolio?
D. What is the standard deviation of your portfolio?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started