You have recently completed your training contract and managed to save a small amount of money during the three years of your contract. You are thinking about investing the money and are considering investment opportunities which would maximize your return. A friend of yours has recently received a ‘hot tip’ from his uncle for HiFly Ltd, a share on the JSE, which is currently providing high returns. You are looking at investing 40% of your money in HiFly Ltd and the balance in Treasury Bills. The average rate of return on Treasury Bills next year will be 9%. You have been provided with the following relevant information: (Information attached in image below) ROUND ALL ANSWERS TO TWO DECIMAL PLACES REQUIRED: Calculate the expected return of HiFly Ltd. Answer% Calculate the expected return of the market. Answer% Calculate the standard deviation of HiFly Ltd. Answer% Calculate the standard deviation of the market. Answer% Calculate the covariance of returns between the market and HiFly Ltd. Answer Calculate the expected return on your portfolio. Answer%
You have recently completed your training contract and managed to save a small amount of money during the three years of your contract. You are thinking about investing the money and are considering investment opportunities which would maximize your return. A friend of yours has recently received a ‘hot tip’ from his uncle for HiFly Ltd, a share on the JSE, which is currently providing high returns. You are looking at investing 40% of your money in HiFly Ltd and the balance in Treasury Bills. The average
(Information attached in image below)
ROUND ALL ANSWERS TO TWO DECIMAL PLACES
REQUIRED:
Calculate the expected return of HiFly Ltd. Answer%
Calculate the expected return of the market. Answer%
Calculate the standard deviation of HiFly Ltd. Answer%
Calculate the standard deviation of the market. Answer%
Calculate the covariance of returns between the market and HiFly Ltd. Answer
Calculate the expected return on your portfolio. Answer%
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