FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose you borrow $2800 at the risk-free rate of 8% and invest these funds together with $5000 of your own funds in the market portfolio

Suppose you borrow $2800 at the risk-free rate of 8% and invest these funds together with $5000 of your own funds in the market portfolio (i.e., the total amount invested is $7800). The standard deviation of the market portfolio is 25%. What would be the standard deviation of your portfolio?

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

Contemporary Financial Management

Contemporary Financial Management

Authors: James R Mcguigan, R Charles Moyer, William J Kretlow

10th Edition

978-0324289114, 0324289111

More Books

Students also viewed these Finance questions

Question

Due to the rapid changes brought by the exponential advancement of information and communication technology, being Agile is the name of the game in today's organizational life. expound your understa

Answered: 1 week ago

Question

★★★★★
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...

Answered: 1 week ago

Question

★★★★★
Question one. Commonwealth Bank of Australia (CBA) has reported a 99% Value at Risk (VaR) of 3.09% over a 1268 trading period. What does this mean? (3 marks) b. Why do some investors prefer to use...

Answered: 1 week ago

Question

★★★★★
Access various employment Web sites (for example, www.monster.com and www.dice.com ) and find several job descriptions for a database administrator. Are the job descriptions similar? What are the...

Answered: 1 week ago

Question

★★★★★
The main premise for development at your company in the coming years is to shift its offshore services to Africa. As such, you have been asked to develop a report that evaluates which African...

Answered: 1 week ago

Question

★★★★★
n How regulation, technology and the changing economic environment combined in the stimulation of off-balance-sheet activity and liability management

Answered: 1 week ago

Question

★★★★★
preparing for and completing job interviews and considering offers.

Answered: 1 week ago

Question

★★★★★
Labopharm Inc. is authorized to issue an unlimited number of common shares and 100,000 shares of $24 non-cumulative preferred. The company completed the following transactions: Required 1. Prepare...

Answered: 1 week ago

Question

★★★★★
Suppose you are studying the kinetics of the iodine - catalyzed decomposition of hydrogen peroxide. 2 H 2 O 2 longrightarrow 2 H 2 O + O 2 * * If you determine the initial rate is 7 . 5 0 1 0 - 4 M s...

Answered: 1 week ago

Question

★★★★★
Graph the 3-month T-bill interest rate (i3), the 10-year government bond interest rate (i10), and the CPI inflation rate (based on the % change in the CPI from one year earlier) on the same figure...

Answered: 1 week ago

Question

★★★★★
A two-mass system consists of a piston of mass \(m_{1}\), connected by two elastic springs, that moves inside a tube as shown in Fig. 5.23. A pendulum of length \(l\) and end mass \(m_{2}\) is...

Answered: 1 week ago

Question

★★★★★
Two particles carrying charges \(q_{1}=-4 \mu \mathrm{C}\) and \(q_{2}=\) \(12 \mu \mathrm{C}\) are located \(5 \mathrm{~m}\) apart. Choose a coordinate system where the first particle is at the...

Answered: 1 week ago

Question

★★★★★
A 6 in. sch 40 pipeline carries a petroleum fraction (viscosity $15 \mathrm{cP}, \mathrm{SG} 0.85$ ) at a velocity of $7.5 \mathrm{ft} / \mathrm{s}$, from a storage tank at $1 \mathrm{~atm}$ pressure...

Answered: 1 week ago

Question

★★★★★
A 2 in. sch 40 pipe carries $\mathrm{SAE} 10$ lube oil at $100^{\circ} \mathrm{F}(\mathrm{SG}=0.928)$. The flow rate may be as high as $55 \mathrm{gpm}$, and you must select an orifice meter to...

Answered: 1 week ago

Question

★★★★★
Two items both have reorder points with service levels of 99%. One of the items is ordered 10 times a year, and the other item is ordered 20 times a year. Do these two items have the same overall...

Answered: 1 week ago

Question

★★★★★
In virtual reality ( VR ) technology, the leading technology used in an exocentric environment is grid computations nanotechnologies 3 D graphics quick response codes

Answered: 1 week ago

Question

★★★★★
The Place-Plus real estate development firm in Problem 24 is dissatisfied with the economists estimate of the probabilities of future interest rate movement, so it is considering having a financial...

Answered: 1 week ago

Question

★★★★★
18. When we convert our data into a score from a probability distribution, what do we call the value we obtain? (a) Significant (b) Not significant (c) The test statistic (d) The power of the study

Answered: 1 week ago

Question

★★★★★
20. If you find in a study that your p-value is 0.05, what is the probability of the alternative hypothesis being true? (a) 0.05 (b) 1 minus 0.05 (c) We cannot work out the probability of the...

Answered: 1 week ago

Question

★★★★★
19. Imagine we conduct two studies. In study A we have 1000 participants and obtain a p-value of 0.01, whereas in study B we have only 20 participants and a p-value of 0.05. In which of these two...

Answered: 1 week ago

Previous Question Next Question