Question
Assume that you manage a risky portfolio with an expected rate of return of 26% and a standard deviation of 36%. The T-bill rate is
Assume that you manage a risky portfolio with an expected rate of return of 26% and a standard deviation of 36%. The T-bill rate is 8%. Your client decides to invest in your risky portfolio a proportion (y) of his total investment budget with the remainder in a T-bill money market fund so that his overall portfolio will have an expected rate of return of 14%. What is the proportion y? (Assignment 1 and exam review)
- 33%
- 66%
- 38%
- 50%
- 14%
Assume that you manage a risky portfolio with an expected rate of return of 26% and a standard deviation of 36%. The T-bill rate is 8%. Your client decides to invest in your risky portfolio a proportion (y) of his total investment budget with the remainder in a T-bill money market fund so that his overall portfolio will have an expected rate of return of 14%. What is the proportion y? (Assignment 1 and exam review)
- 33%
- 66%
- 38%
- 50%
- 14%
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Corporate Financial Management
Authors: Glen Arnold
4th Edition
0273719068, 978-0273719069
