Register
A broad market index has an expected rate of return of 8% and a standard deviation of 40%. The T-bill rate is 1%. An investor has $10,000 to invest and wants a 10% expected rate of return. (a) Assuming
170k views
3 votes
A broad market index has an expected rate of return of 8% and a standard deviation of 40%. The T-bill rate is 1%. An investor has $10,000 to invest and wants a 10% expected rate of return.

(a) Assuming the index and T-bills are the only investments available, what do you recommend? (Your answer must include portfolio weights and state dollar investments.)
(b) What is the standard deviation of the rate of return on this investment?

User Mahesh N
by
5.9k points

1 Answer

4 votes

Find the below attachment

A broad market index has an expected rate of return of 8% and a standard deviation-example-1
User Camillobruni
by
5.6k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

5.7m questions

7.5m answers

Other Questions

_____ reminds customers and clients that they made a good choice in selecting a company with which to do business, or it reminds them of the good qualities of their purchase.​
On august 1 the darius co. purchased a photocopy machine for $8,000. the estimated annual depreciation on the machine is $1,680. if the company prepares annual financial statements on december 31, the
When president obama was elected, the u.s. economy was in trouble, and has slid into a recession. consumer spending was low and getting worse. in an effort to stop the decline, president obama proposed
Ensuring that an individual is who they claim to be is the function of _____. select one: a. confidentiality b. authorization c. availability d. authentication e. nonrepudiation
The current market price for good y is above the equilibrium price, and then the price of a subsitute good, x, increases. the demand curve for good y shifts as a result. what is the likely outcome of the
Link Copied!