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how to solve part 4and 5 Intro You have $9,000 to invest and are deciding between investing in an equity mutual fund and Treasury bills.
how to solve part 4and 5
Intro You have $9,000 to invest and are deciding between investing in an equity mutual fund and Treasury bills. The fund has an expected return of 9% and a standard deviation of returns of 23%. T-bills have a return of 1%. Part 1 | Attempt 1/10 for 10 pts. If you put 70% into the mutual fund, what is your expected rate of return for the complete portfolio? 6.6% Correct E(rc) = y E(rp) + (1-y) rt = 0.7 * 0.09 +0.3 * 0.01 = 0.066 Attempt 1/10 for 10 pts. Part 2 What is the standard deviation of returns if you put 70% into the mutual fund? 16.10% Correct Oc = y op Attempt 1/10 for 10 pts. Part 4 What's the Sharpe ratio of the complete portfolio with Oc=10%? B+ decimals Submit Part 5 Attempt 1/10 for 10 pts. If you wanted to achieve an expected return of 6% for the complete portfolio instead, how much money would you have to invest in the mutual fund (in $)? 0+ decimals SubmitStep by Step Solution
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