Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
15th Edition
ISBN: 9780134478197
Author: ZUTTER
Publisher: PEARSON
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Chapter 8, Problem 8.4WUE
Summary Introduction
To discuss:
Expected return of portfolio.
Introduction:
Expected portfolio return: In financial context, expected portfolio return is seen as percentage that represents the expected profit on a portfolio of investments.
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Students have asked these similar questions
Portfolio Analysis (Er)
(30 points)
3. You have worked with your client and put together an investment portfolio based on the client's
preferences for risk. The portfolio will be divided among several asset classes defined below.
Asset Class
Allocation
Expected Return
Standard Deviation of Returns
10 Year T-Bonds
37%
4.13%
0.00%
International Bonds (Private
Corporate)
12%
6.32%
34.23%
Rusell 2000 ETF
41%
6.70%
12.32%
FTSE 100 ETF
10%
32.10%
21.30%
100%
a. What is the expected return for this portfolio? Provide the result as x.xx%.
b. What is the expected return for the portfolio if you decide not to invest in treasury bonds? Provide
the result as x.xx%.
c. What asset class would you eliminate to maximize expected return? Explain why.
You are going to invest $20,000 in a portfolio consisting of assets X, Y, and Z, as follows:
Asset Annual Return Probability Beta Proportion
X 10% 0.50 1.2 0.333
Y 8% 0.25 1.6 0.333
Z 16% 0.25 2.0 0.333
Given the information in Table 5.2, The beta of the portfolio in Table 8.2, containing assets X, Y, and Z is ________.
Select one:
a. 1.6
b. 2.0
c. 1.5
d. 2.4
Please help me answer this question in Excel Form
2. The risk-free rate is 4%, and the required return on the market is 12%.
b. A portfolio invests 40% in the asset in (a) and the rest in a market portfolio. What is the required return on this portfolio?
Thanks :)
Chapter 8 Solutions
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Ch. 8.1 - What is risk in the context of financial decision...Ch. 8.1 - Prob. 8.2RQCh. 8.1 - Compare the following risk preferences: (a) risk...Ch. 8.2 - Explain how the range is used in scenario...Ch. 8.2 - Prob. 8.5RQCh. 8.2 - Prob. 8.6RQCh. 8.2 - What does the coefficient of variation reveal...Ch. 8.3 - What is an efficient portfolio? How can the return...Ch. 8.3 - Prob. 8.9RQCh. 8.3 - How does international diversification enhance...
Ch. 8.4 - Prob. 8.11RQCh. 8.4 - Prob. 8.12RQCh. 8.4 - Prob. 8.13RQCh. 8.4 - What impact would the following changes have on...Ch. 8 - Prob. 1ORCh. 8 - Prob. 8.1STPCh. 8 - Prob. 8.2STPCh. 8 - Prob. 8.1WUECh. 8 - Prob. 8.2WUECh. 8 - Prob. 8.3WUECh. 8 - Prob. 8.4WUECh. 8 - Prob. 8.5WUECh. 8 - Prob. 8.6WUECh. 8 - Prob. 8.1PCh. 8 - Prob. 8.2PCh. 8 - Prob. 8.3PCh. 8 - Prob. 8.4PCh. 8 - Prob. 8.5PCh. 8 - Learning Goal 2 P8-6 Bar charts and risk Swans...Ch. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Prob. 8.9PCh. 8 - Prob. 8.10PCh. 8 - Prob. 8.11PCh. 8 - Prob. 8.12PCh. 8 - Prob. 8.13PCh. 8 - Prob. 8.14PCh. 8 - Learning Goal 4 P8- 15 Correlation, risk, and...Ch. 8 - Prob. 8.16PCh. 8 - Learning Goal 5 P8- 17 Total, nondiversifiable,...Ch. 8 - Prob. 8.18PCh. 8 - Prob. 8.19PCh. 8 - Prob. 8.20PCh. 8 - Prob. 8.21PCh. 8 - Prob. 8.22PCh. 8 - Prob. 8.23PCh. 8 - Prob. 8.24PCh. 8 - Prob. 8.25PCh. 8 - Prob. 8.26PCh. 8 - Prob. 8.27PCh. 8 - Learning Goal 6 P8- 28 Security market line (SML)...Ch. 8 - Prob. 8.29PCh. 8 - Prob. 8.30PCh. 8 - Prob. 8.31PCh. 8 - Spreadsheet Exercise Jane is considering investing...
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