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You have an optimal portfolio of stocks, risky bonds and the riskfree asset. Holding everything else fixed, if bond return goes up, what would happen?
You have an optimal portfolio of stocks, risky bonds and the riskfree asset. Holding everything else fixed, if bond return goes up, what would happen? (choose all that applies) A. the Sharpe ratio of the tangency portfolio would increase B. the Sharpe ratio of the tangency portfolio would decrease C. the Sharpe ratio of the tangency portfolio would remain unchanged D. the stock and bond weight for the tangency portfolio would change E. the stock and bond weight for the tangency portfolio would remain unchanged You have an optimal portfolio of stocks, risky bonds and the riskfree asset. Holding everything else fixed, if the correlation between stock and bond goes down, what would happen? (choose all that applies) A. the Sharpe ratio of the tangency portfolio would increase B. the Sharpe ratio of the tangency portfolio would decrease C. the Sharpe ratio of the tangency portfolio would remain unchanged D. the stock and bond weight for the tangency portfolio would change E. the stock and bond weight for the tangency portfolio would remain nged You have an optimal portfolio of stocks, risky bonds and the riskfree asset. Holding everything else fixed, if risk free rate goes up, what would happen? (choose all that applies) A. the Sharpe ratio of the tangency portfolio would increase B. the Sharpe ratio of the tangency portfolio would decrease C. the Sharpe ratio of the tangency portfolio would remain unchanged D. the stock and bond weight for the tangency portfolio would change E. the stock and bond weight for the tangency portfolio would remain unchanged You have an optimal portfolio of stocks, risky bonds and the riskfree asset. Holding everything else fixed, if you became more risk averse ,what would happen? (choose all that applies) A. the Sharpe ratio of the tangency portfolio would increase B. the Sharpe ratio of the tangency portfolio would decrease C. the Sharpe ratio of the tangency portfolio would remain unchanged D. the stock and bond weight in the tangency portfolio would change E. the stock and bond weight in the tangency portfolio would remain unchanged F. The dollar value of bond in your portfolio would increase G. The dollar value of bond in your portfolio would decrease You have an optimal portfolio of stocks, risky bonds and the riskfree asset. Holding everything else fixed, if you now have the option to incorporate another asset with positive return and zero correlation with stock and bond (say, bitcoin) into your portfolio. What would happen? A. the Sharpe ratio of the tangency portfolio would increase B. the Sharpe ratio of the tangency portfolio would decrease C. the Sharpe ratio of the tangency portfolio would remain unchanged D. the stock and bond weight in the tangency portfolio would change E. the stock and bond weight in the tangency portfolio would remain unchanged F. The dollar value of bond in your portfolio would increase G. The dollar value of bond in your portfolio would decrease
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