A risky portfolio has an expected return of 17.27% and a standard deviationof 24.83%. The risk-free rate is 3%. The investor targets a complete portfoliowith an expected return of 16%. The standard deviation of the completeportfolio is%. Answers must be entered with 2 decimal placesand no dollar signs, e.g. 6 as 6.00; 32.346 as 32.35.pageNext page

The expected rate of portfolio is weighted average rate of return of individual stocks in the…

A risky portfolio has an expected return of 17.27% and a standard devia of 24.83%. The risk-free rate is 3%. The investor targets a complete po with an expected return of 16%. The standard deviation of the complete= portfolio is %. Answers must be entered with 2 decimal placi and no dollar signs , e.g. 6 as 6.00; 32.346 as 32.35.

A risky portfolio has an expected return of 17.27% and a standard devia of 24.83%. The risk-free rate is 3%. The investor targets a complete po with an expected return of 16%. The standard deviation of the complete= portfolio is %. Answers must be entered with 2 decimal placi and no dollar signs , e.g. 6 as 6.00; 32.346 as 32.35.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter3: Risk And Return: Part Ii

Section: Chapter Questions

Problem 3P: Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B...

See similar textbooks

Similar questions

Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B has an expected return of 18% and a standard deviation of 60%. The correlation coefficient between Stocks A and B is 0.2. What are the expected return and standard deviation of a portfolio invested 30% in Stock A and 70% in Stock B?
You have observed the following returns over time: Assume that the risk-free rate is 6% and the market risk premium is 5%. What are the betas of Stocks X and Y? What are the required rates of return on Stocks X and Y? What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y?
A portfolio has an average return of 14.4 percent, a standard deviation of 18.5 percent, and a beta of 1.96. The risk-free rate is 2.6 percent. What is the Sharpe ratio?
Consider a portfolio that offers an expected rate of return of 11% and a standard deviation of 26%. T-bills offer a risk-free 7% rate of return. What is the maximum level of risk aversion for which the risky portfolio is still preferred to T-bills? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
A portfolio that combines the risk-free asset and the market portfolio has an expected return of 6.4 percent and a standard deviation of 9.4 percent. The risk-free rate is 3.4 percent, and the expected return on the market portfolio is 11.4 percent. Assume the capital asset pricing model holds. What expected rate of return would a security earn if it had a .39 correlation with the market portfolio and a standard deviation of 54.4 percent? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
A portfolio that combines the risk-free asset and the market portfolio has an expected return of 7 percent and a standard deviation of 10 percent.The risk-free rate is 4 percent, and the expected return on the market portfolio is 12 percent. Assume the capital asset pricing model holds. Compute and justify the expected rate of return would a security earn if it had a 0.45 correlation with the market portfolio and a standard deviation of 55 percent.
The market portfolio has an expected return of 11.5 percent and a standard deviation of 19 percent. The risk-free rate is 4.1 percent. **You are required to calculate any extra information i.e. beta, covariance if necessary Calculate the expected return on well-diversified portfolio with a standard deviation of 9 percent; and the standard deviation of a well-diversified portfolio if the expected return is 20 percent.
The market index return is 1.3% and its standard deviation is 17%. The risk free rate is 3%. Portfolio Q generates an annual return of 14%, and has a beta of 1.35, and a standard deviation of 23%. Consider a complete portfolio that consists of the portfolio Q and the risk free asset. If we require the standard deviation of the complete portfolio to be the same as the market portfolio, what is the Sharpe ratio of the complete portfolio?
You are given the following data: Risk-free rate is 4.1 percent, market return is 6.5 per cent, and market volatility is 12.2 per cent. The return of a portfolio is 11 per cent, its volatility is 15.2214 per cent, and its beta is 0.7. Calculate the measure called the Information ratio. A. 0.193 B. 0.414 C. 0.548 D. 4.500
Your portfolio has a beta of 1.73, a standard deviation of 29 percent, and an expected return of 11.4 percent. The market return is 10.9 percent and the risk-free rate is 2.2 percent. What is the Treynor ratio?
A stock has a beta of 1.26 and an expected return of 12.4 percent. A risk-free asset currently earns 4.1 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If a portfolio of the two assets has a beta of .86, what are the portfolio weights? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.) c. If a portfolio of the two assets has an expected return of 11.6 percent, what is its beta? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. If a portfolio of the two assets has a beta of 2.46, what are the portfolio weights? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.)
You form a complete portfolio by investing 30% of your portfolio in a risky portfolio that has an expected rate of return of 9% and a standard deviation of 19%, and the rest in T-bill with a 2% rate. What is the standard deviation of your complete portfolio? Enter your answer as a decimal number, rounded to three decimal places.