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4-9 4. Your investment has a 20% chance of earning a 30% rate of return, a 50% chance of earning a 10% rate of return,

4-9
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4. Your investment has a 20% chance of earning a 30% rate of return, a 50% chance of earning a 10% rate of return, and a 30% chance of losing 6%. What is your expected return on this investment? 5. Your investment has a 40% chance of earning a 15% rate of return, a 50% chance of earning a 10% rate of return, and a 10% chance of losing 3%. What is the standard deviation of this investment? 6. A portfolio with a 25% standard deviation generated a return of 15% last year when T-bills were paying 4.5%. What is Sharpe ratio of the portfolio. 7. You invest $1,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 16% and a standard deviation of 20% and a Treasury bill with a rate of return of 6%. What % of your complete portfolio should be invested in the risky portfolio if you want your complete portfolio to have a standard deviation of 9%. 8. You invest $10,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 15% and a standard deviation of 21% and a Treasury bill with a rate of retum of 5%. How much money should be invested in the risky asset to form a portfolio with an expected return of 11%? 9. The standard deviation of return on investment A is 0.10, while the standard deviation of return on investment B is 0.05. If the covariance of returns on A and B is 0.0030, what is the correlation coefficient between the returns on A and B

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