Question
Question 16 a) You manage a risky portfolio with an expected rate of return of 14 percent and a standard deviation of 46 percent. The
Question 16
a) You manage a risky portfolio with an expected rate of return of 14 percent and a standard deviation of 46 percent. The T-bill rate is 4.00%. Your client chooses to invest 85 percent of a portfolio in your fund and 15 percent in a T-bill MMF (money market fund). What is the expected return of your client's portfolio?
A. | 15.00% | |
B. | 13.50% | |
C. | 12.50% | |
D. | 14.10% |
b)A project has a 70% probability of doubling your investment in one year and a 30.00% chance of losing half of your investment in one year. What is the standard deviation of the rate of return on this investment?
A. | 64.50% | |
B. | 68.74% | |
C. | 61.60% | |
D. | 31.77% |
C) If some stock has an expected rate of return of 6.00 and the risk-free rate is 8.00% and the expected rate of return on the market is 18.00%, What is the stocks beta?
A. | -0.25 | |
B. | 0.30 | |
C. | -0.20 | |
D. | 0.45 |
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