Assume you are 18 years old and you were able to save php 50.00. Given what you’ve learned on portfolio diversification, how will you allocate your savings to bank time deposit and stocks (i.e. 100%-0%, 50%-50%, etc?) Explain your answer
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Assume you are 18 years old and you were able to save php 50.00. Given what you’ve learned on portfolio diversification, how will you allocate your savings to bank time deposit and stocks (i.e. 100%-0%, 50%-50%, etc?) Explain your answer
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- Suppose you have $10,000 in cash and you decide to borrow another $10,000 at a(n) 6% interest rate to invest in the stock market. You invest the entire $20,000 in an exchange-traded fund (ETF) with a 11% expected return and a 20% volatility. What is your expected return on your investment?You have invested in the following portfolio: an amount of cash USD 111 earning 0.04 percent return. An amount of treasury bills USD 171, earning 0.07 percent return, an amount of bonds USD 150 earning 0.07 percent return. And an amount of stock USD 219 earning -0.11 percent return. Calculate the investment portfolio return..You invest funds in a stock market index fund whose share price is currently K100, and your time horizon is one year. You expect the cash dividend during the year to be K4. Suppose your best guess is that the share price will be K110. Calculate the following: expected dividend yield; holding period return (HPR); Capital gains yield and total holding period rate of return. (b) You buy a K10 000 face value Treasury Bill in one month for K9 900. Calculate your holding period return.
- Bond valuation related problems should be solved by using a financial calculator or MS excel spreadsheet. Accordingly, you must show the values of all relevant time valu of money variables If D1 = $1.50 g (which is constant) = 6.5%, Po = $56, what is the stock's expected capital gains yield for the coming year?You are considering how to invest part of your retirement savings.You have decided to put$100,000 into three stocks: 55% of the money in GoldFinger (currently $24/share),23%of the money in Moosehead (currently$85/share),and the remainder in Venture Associates (currently $3/share).Suppose GoldFinger stock goes up to $33/share, Moosehead stock drops to $66/share, and Venture Associates stock rises to $5 per share. a. What is the new value of the portfolio? b. What return did the portfolio earn? c. If you don't buy or sell any shares after the price change, what are your new portfolio weights?You invest funds in a stock market index fund whose share price is currently K100, and your time horizon is one year. You expect the cash dividend during the year to be K4. Suppose your best guess is that the share price will be K110. Calculate the following: expected dividend yield; holding period return (HPR); Capital gains yield and total holding period rate of return. Further, You buy a K10 000 face value Treasury Bill in one month for K9 900. Calculate your holding period return.
- You are considering how to invest part of your retirement savings.You have decided to put $600,000 into three stocks: 68% of the money in GoldFinger (currently $27/share), 22% of the money in Moosehead (currently $79/share), and the remainder in Venture Associates (currently $2/share). Suppose GoldFinger stock goes up to $31/share, Moosehead stock drops to $62/share, and Venture Associates stock rises to $13 per share. a. What is the new value of the portfolio? b. What return did the portfolio earn? c. If you don't buy or sell any shares after the price change, what are your new portfolio weights?You create a portfolio consisting of $23000 invested in a mutual fund with beta of 1.3, $25000 invested in Treasury Securities (assume risk-free), and $12000 invested in an index fund tracking the market. According to surveys, the expected market risk premium is 6.6%, risk free rate is 1.3%. What is the expected return of this portfolio according to CAPM? Answer in percent, rounded to one decimal place.Suppose you have $375,000 in cash, and you decide to borrow another $63,750 at a 7% interest rate to invest in the stock market. You invest the entire $438,750 in a portfolio J with a 20% expected return and a 28% volatility. a. What is the expected return and volatility (standard deviation) of your investment? b. What is your realized return if J goes up 39% over the year? c. What return do you realize if J falls by 19% over the year?
- Suppose that a portfolio management company manages an investment fund. The fund manager observes a bond in the market and intends to add it to the fund portfolio. The bond has a 100.000 TL par value, 10% coupon rate (coupon payments are annual) and a 2-years maturity. The business model is to “hold-until-maturity”. The company purchases the bond at the beginning of the year when the market yields are 12%. After exactly 1 year of investment, market yields increase to 14%. What would be the approximate profit or loss amount in the income statement for that 1-year period? A) 1.723 TL loss B) 10.191 TL profit C) 9.871 TL profit D) 1.594 TL loss E) OTHERAn investor has $45,000 to invest. He wants to diversify his portfolio by putting dividing the money among stocks, bonds and mutual funds. He has chosen one fund from each type in which to invest. Over the last 10 years the stocks have earned 9.75%, the bonds have earned 5.25% and the mutual fund has earned 7% interest. The investor expects that the funds will all continue to perform in the future similarly to how they have performed over the last ten years. Because he is willing to take some risk, the investor has decided that he will invest twice as much money in stocks as he will in bonds. How much should he invest in each account in order to earn 8% return on his investment?Suppose that you initially invested $10,000 in the Stivers mutual fund and $5,000 in theTrippi mutual fund. The value of each investment at the end of each subsequent year isprovided in the table:Year Stivers ($) Trippi ($)1 11,000 5,6002 12,000 6,3003 13,000 6,9004 14,000 7,6005 15,000 8,5006 16,000 9,2007 17,000 9,9008 18,000 10,600Which of the two mutual funds performed better over this time period?