Homework: Module 9: Chapters 10 and 11 - Risk and Return, Po Score: 0 of 1 pt 21 of 26 (20 completo) HW Score: 66.67%, 17.33 of 26 pts P11-46 (similar to) Question Help Your investment portfolio consists of $11,000 invested in only one stock-Amazon Suppose the risk-free rate is 4%, Amazon stock has an expected retum of 14% and a volatty of 416 and the market portfolio has an expected return of 0% and a volatility of 19%. Under the CAPM assumptions, What alternative investment has the lowest possible volatility while having the same expected return as Amaron? What is the volatility of this investment? b. What investment has the highest possible expected return while having the same volatility as Amazon? What is the expected return of this investment? Hint: Make sure to round all intermediate calculations to at least five decimal places a. What alternative investment has the lowest possible volatility while having the same expected return as Amazon? To create an alternative investment that has the lowest possible volatility while having the same expected return as Amazon, we use the following strategy Sell worth of Amazon stock. (Round to the nearest dollar) Borrow at the risk-free rate. (Round to the nearest dollar) worth of the market portfolio (Round to the nearest dollar) worth of the risk-free investment (Round to the nearest dollar.) Buy Buy Enter your answer in the edit fields and then click Check Answer Clear All parts remaining Homework: Module 9: Chapters 10 and 11 - Risk and Return, Po Score: 0 of 1 pt 21 of 26 (20 completo) HW Score: 66.67%, 17.33 of 26 pts P11-46 (similar to) Question Help Your investment portfolio consists of $11,000 invested in only one stock-Amazon Suppose the risk-free rate is 4%, Amazon stock has an expected retum of 14% and a volatty of 416 and the market portfolio has an expected return of 0% and a volatility of 19%. Under the CAPM assumptions, What alternative investment has the lowest possible volatility while having the same expected return as Amaron? What is the volatility of this investment? b. What investment has the highest possible expected return while having the same volatility as Amazon? What is the expected return of this investment? Hint: Make sure to round all intermediate calculations to at least five decimal places a. What alternative investment has the lowest possible volatility while having the same expected return as Amazon? To create an alternative investment that has the lowest possible volatility while having the same expected return as Amazon, we use the following strategy Sell worth of Amazon stock. (Round to the nearest dollar) Borrow at the risk-free rate. (Round to the nearest dollar) worth of the market portfolio (Round to the nearest dollar) worth of the risk-free investment (Round to the nearest dollar.) Buy Buy Enter your answer in the edit fields and then click Check Answer Clear All parts remaining
