An investment of 500 euros can give income of 350 euros with a probability of 50% or 900 euros with a probability of 50%. What is the standard deviation and value at risk of the investment?
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- Suppose you have $2,000 to invest. The market portfolio has an expected return of 10.5 percent and a standard deviation of 16 percent. The risk-free rate is 3.75 percent. How much should you invest in the risk-free asset if you wish to have a 15 percent return on the portfolio?Suppose that you have $1 million and the following two opportunities from which to construct a portfolio:a. Risk-free asset earning 12% per year.b. Risky asset with expected return of 30% per year and standard deviation of 40%.If you construct a portfolio with a standard deviation of 30%, what is its expected rate of return?CONSIDERING THAT: You want to make an initial investment of $100,000, and maintain a constant weighting of 40% for asset 1 and 60% for asset 2. CALCULATE: What would be the average rate of return on asset 1? What would be the average rate of return on asset 2? What would be the average rate of return of the portafolio?
- The present worth of income from an investment that follows an arithmetic gradient was projected to be P 475,000. Ifthe income in year one is expected to be P 25,000, how much would the gradient have to be in each year through year 8 if the interest rate is 10% per year?An investment advisor has recommended a R50,000 portfolio containing assets R, J, and K; R25,000 will be invested in asset R, with an expected annual return of 12 percent; R10,000 will be invested in asset J, with an expected annual return of 18 percent; and R15,000 will be invested in asset K, with an expected annual return of 8 percent. What is the expected annual return of this portfolio? What is the correct answer? A. 12.01% B. 12.00% C. 11.98% D. 12.93%An investment under consideration has a payback of seven years and a cost of $870,000. Assume the cash flows are conventional. If the required return is 11 percent, what is the worst-case NPV?
- You are looking to invest in a project. The expected return of 5% is used as the discount rate. The initial investment is P6 million and the project will last for five years, with the following estimated cash flows per year: P500,000; P600,000.00; P700,000.00; P300,000.00; P200,000.00 and P100,000.00 respectively.. A. Compute for Net Present Value B. How many percent is the Internal rate of Return?An investment under consideration has a payback of seven years and a cost of $685,000. Assume the cash flows are conventional. If the required return is 11 percent, what is the worst-case NPV? What is the best case NPV?Suppose you have a project that has a 0.4 chance of tripling your investment in a year and a 0.6 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.) What is the standard deviation?
- The data related to a project with an investment amount of 10.000.000 TL is as follows, and the risk-free discount rate is 10%. YEAR1 YEAR2 Possibility Cash Flows Possibility Cash Flows %20 3.000.000 %25 5.000.000 %60 7.000.000 %50 8.000.000 %20 8.000.000 %25 9.000.000 Calculate the expected Net Present Value of the project and the Standard Deviation of its Net Present Value based on these data.What is the internal rate of return (IRR) of an investment that requires an initial investmen of $11,000 today and pays $15,400 in one year's time?A project has a 0.68 chance of doubling your investment in a year and a 0.32 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment?