Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please explain with great detail as I want to understand this. 1)An investor develops a portfolio with 25% in a riskfree asset with a return

Please explain with great detail as I want to understand this.

1)An investor develops a portfolio with 25% in a riskfree asset with a return of 6% and the rest in a risky asset with expected return of 9% and standard deviation of 6%. The standard deviation for the portfolio is:

(a) 20.3%. (b) 4.5%. (c) 0.0%. (d) 27.0%.

2)An investor has a portfolio with 60% in a riskfree asset with a return of 5% and the rest in a risky asset with an expected return of 12% and a standard deviation of 10%. Respectively, the expected return and standard deviation of the portfolio are (a) 10.5%. (b) 9.7%. (c) 11.4%. (d) 12.6%.

3)If the proportion invested in the riskfree asset is -.4, the proportion invested in the risky portfolio is: (a) -1.4. (b) 0.6. (c) 0.0. (d) 1.4. (e) -0.6.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Victorian Literature And Finance

Authors: Francis O'Gorman

1st Edition

0199281920, 978-0199281923

More Books

Students also viewed these Finance questions

Question

Comment should this MNE have a global LGBT policy? Why/ why not?

Answered: 1 week ago