A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term governmentand corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probabilitydistributions of the risky funds are:Stock fund (S)Bond fund (B)Expected Return16%Standard Deviation34%10%25%The correlation between the fund returns is 0.17.Problem 6-9 (Algo)Required:Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal riskyportfolio. (Do not round intermediate calculations and round your final answers to 2 decimal places.)× Answer is complete but not entirely correct.Portfolio invested in the stockPortfolio invested in the bondExpected returnStandard deviation76.00 ×%24.00 ×%14.84%21.39%

Mutual funds are financial institutions that invest money on behalf of investors in different asset…

and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Stock fund (S) Bond fund (B) Expected Return 16% Standard Deviation 34% 10% 25% The correlation between the fund returns is 0.17. lem 6-9 (Algo) red: numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky lio. (Do not round intermediate calculations and round your final answers to 2 decimal places.)

and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Stock fund (S) Bond fund (B) Expected Return 16% Standard Deviation 34% 10% 25% The correlation between the fund returns is 0.17. lem 6-9 (Algo) red: numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky lio. (Do not round intermediate calculations and round your final answers to 2 decimal places.)

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter13: Investing In Mutual Funds, Etfs, And Real Estate

Section: Chapter Questions

Problem 8FPE

See similar textbooks

Similar questions

Suppose that the return for a particular large-cap stock fund is normally distributed with a mean of 14.4% and standard deviation of 4.4%. a. What is the probability that the large-cap stock fund has a return of at least 20%? b. What is the probability that the large-cap stock fund has a return of 10% or less?
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 5.5%. The probability distribution of the risky funds is as follows: Expected Return Standard Deviation Stock fund (S) 16% 32% Bond fund (B) 10 23 The correlation between the fund returns is 0.20. Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.) portfolio invested in the stock portfolio invested in the bond expected return standard deviation
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distribution of the risky funds is as follows: Expected Return Standard Deviation Stock fund (S) 16% 36% Bond fund (B) 10% 27% The correlation between the fund returns is 0.20 Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round intermediate calculations and round your final answers to 2 decimal places. Omit the "%" sign in your response.) Portfolio invested in the stock % Portfolio invested in the bond % Expected return % Standard deviation %
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 4.5%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 15% 35% Bond fund (B) 6% 29% The correlation between the fund returns is .0517. What is the expected return and standard deviation for the minimum-variance portfolio of the two risky funds? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 4.5%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 15% 40% Bond fund (B) 9% 31% The correlation between the fund returns is 0.15. Required: Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round intermediate calculations and round your final answers to 2 decimal places.)
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 5.4%. The probability distribution of the risky funds is as follows: Expected Return Standard Deviation Stock fund (S) 15% 44% Bond fund (B) 8 38 The correlation between the fund returns is 0.15.Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round intermediate calculations and round your final answers to 2 decimal places. Omit the "%" sign in your response.)
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 17% 32% Bond fund (B) 11% 23% The correlation between the fund returns is 0.25. Required: Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round intermediate calculations and round your final answers to 2 decimal places.) Portfolio Invested in Stock ____ % Portfolio Invested in the bond ____% Expected Return ____% Standard Deviation ___%
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 3.5%. The proability distributionsof the risky funds are: Expected Return Standard Deviation Stock Fund (S) 23% 25% Bond Fund (B) 12% 18% *The correlation between the fund returns is .55.* What are the expected return, standard deviation, and sharpe ratio for the minimum-variance portfoilo of the two risky funds, and what would be the weights of the stock and bond fund for an optimal portfoilo?
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected ReturnStandard DeviationStock fund (S)17%32%Bond fund (B)11%23% The correlation between the fund returns is 0.25. Required: Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round intermediate calculations and round your final answers to 2 decimal places.) PORTFOLIO INVESTED IN THE STOCKS PORTFOLIO INVESTED IN THE BONDS EXPECTED RETURN STANDARD DEVIATION PLEASE ANSWER ASAP.
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 4%. The probability distribution of the risky funds is as follows: Expected return Standard Deviation Stock fund 22% 37% Bond Fund 14 23 The correlation between the fund returns is 0.10. You require that your portfolio yield an expected return of 15%, and that it be efficient, on the best feasible CAL. a. What is the standard deviation of your portfolio? (Round your answer to 2 decimal places.) b. What is the proportion invested in the T-bill fund and each of the two risky funds? (Round your answers to 2 decimal places.) T-bill fund stock fund bond fund
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 15% 32% Bond fund (B) 9% 23% The correlation between the fund returns is 0.15. What is the expected return and standard deviation for the minimum-variance portfolio of the two risky funds?
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 8%. The probability distribution of the risky funds is as follows: Expected Return Standard Deviation Stock fund (s) 20% 30% Bond fund (b) 12 15 The correlation between the fund returns is .10. What are the investment proportions in the minimum-variance portfolio of the two risky funds, and what is the expected value and standard deviation of its rate of return?