Required: You manage an equity fund with an expected risk premium of 10% and a standard deviation of 14%. The rate on Treasury bills is 6%. Your client chooses to invest $60,000 of her portfolio in your equity fund and $40,000 in a T-bill money market fund. What is the reward-to-volatility (Sharpe) ratio for the equity fund? (Round your answer to 4 decimal places.) Reward-to-volatility Ratio
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- Required: You manage an equity fund with an expected risk premium of 13.4% and a standard deviation of 48%. The rate on Treasury bills is 5.6%. Your client chooses to invest $105,000 of her portfolio in your equity fund and $45,000 in a T-bill money market fund. What are the expected return and standard deviation of your client's portfolio? (Round your answers to 2 decimal places.) Expected Return Standard Deviation % %Required: You manage an equity fund with an expected risk premium of 10% and a standard deviation of 14%. The rate on Treasury bills is 6%. Your client chooses to invest $60,000 of her portfolio in your equity fund and $40,000 in a T-bill money market fund. What are the expected return and standard deviation of your client’s portfolio? (Do not round intermediate calculations. Round your answers to 1 decimal place.) equired: You manage an equity fund with an expected risk premium of 10% and a standard deviation of 14%. The rate on Treasury bills is 6%. Your client chooses to invest $60,000 of her portfolio in your equity fund and $40,000 in a T-bill money market fund. What is the reward-to-volatility (Sharpe) ratio for the equity fund? (Round your answer to 4 decimal places.)Required: You manage an equity fund with an expected risk premium of 12.2% and a standard deviation of 36%. The rate on Treasury bills is 4.4%. Your client chooses to invest $90,000 of her portfolio in your equity fund and $110,000 in a T-bill money market fund. What is the reward-to-volatility (Sharpe) ratio for the equity fund? (Round your answer to 4 decimal places.) Reward-to-volatility Ratio 0.0975
- What follows is a numeric fill in the blank question with 5 blanks.You manage an equity fund with an expected risk premium of 10% and an expected standard deviation of 14%. The rate on Treasury bills is 6%. Your client chooses to invest $60,000 of her portfolio in your equity fund and $40,000 in a T-bill money market fund. What is the expected return and standard deviation of return on your client’s portfolio? a. Expected return for equity fund: Blank 1. Fill in the blank, read surrounding text. %. b. Expected rate of return of the client’s portfolio: Blank 2. Fill in the blank, read surrounding text % c. Expected Return of the client's portfolio: $ Blank 3. Fill in the blank, read surrounding text. d. The standard deviation of the client's overall portfolio: Blank 4. Fill in the blank, read surrounding text. % (Round to one decimal place.) e. Calculate the Sharpe ratio for the equity fund: Blank 5. Fill in the blank, read surrounding text. (Round to TWO decimal places.)Consider the following information and then calculate the required rate of return for the Global Equity Fund, which includes 4 stocks in the portfolio. The market's required rate of return is 10.00%, the risk-free rate is 7.25%, and the Fund's assets are as follows:Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72. Stock Investment Beta A $185,000 1.35 B $365,000 0.85 C $535,000 –0.45 D $1,145,000 2.08Assume that you manage a risky portfolio with an expected rate of return of 14% and a standard deviation of 46%. The T-bill rate is 4%. Your client chooses to invest 85% of a portfolio in your fund and 15% in a T-bill money market fund. Required: a. What are the expected return and standard deviation of your client's portfolio? (Round your answers to 1 decimal place.) Expected retum Standard deviation b. Suppose your risky portfolio includes the following investments in the given proportions: 30% 30 40 Stock A Stock B Stock C What are the investment proportions of your client's overall portfolio, including the position in T-bills? (Round your answers to 1 decimal place.) Security T-Bills Stock A Stock B Stock C Investment Proportions % per year % per year % % % % Risky portfolio Client's overall portfolio c. What is the reward-to-volatility ratio (S) of your risky portfolio and your client's overall portfolio? (Round your answers to 4 decimal places.) Reward-to-Volatility Ratio
- 1. You manage an equity fund, Panda Eyes, with an expected risk premium of 10% anda standard deviation of 14%. The risk-free rate is 6%. Your client chooses to invest£60,000 of their portfolio in your equity fund and £40,000 in the risk-free rate. # Calculate the expected return and standard deviation of the return onyour client’s portfolio.You manage an equity fund with an expected risk premium of 11.2% and a standard deviation of 26%. The rate on Treasury bills is 4.2%. Your client chooses to invest $70,000 of her portfolio in your equity fund and $30,000 in a T-bill money market fund. What are the expected return and standard deviation of your client’s portfolio? (Round your answers to 2 decimal places.)Assume the risk-free rate is 4%. You are a financial advisor, and must choose one of the funds below to recommend to each of your clients. Whichever fund you recommend, your clients will then combine it with risk-free borrowing and lending depending on their desired level of risk. Expected Return Volatility Fund A 7% 3% Fund B 10% 4% Fund C 9% 4% Which fund would you recommend without knowing your client's risk preference?
- Please show working Please answer ALL OF QUESTIONS 1 AND 2 1. Suppose you are the money manager of a $4.95 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 280,000 1.50 B 460,000 (0.50) C 1,260,000 1.25 D 2,950,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 4%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. 2. Madsen Motors's bonds have 13 years remaining to maturity. Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 10%; and the yield to maturity is 5%. What is the bond's current market price? Round your answer to the nearest cent.As an equity analyst, you have developed the following return forecasts and risk estimates for two different stock mutual funds (Fund T and Fund U}: Forecasted Return CAPM Beta Fund T 9.00% 1.20 Fund U 10.00% 0.80 a. If the risk-free rate is 3.9 percent and the expected market risk premium (£(RM) -RFR} is 6.1 percent, calculate the expected return for each mutual fund according to the CAPM. b. Using the estimated expected returns from part (a) along with your own return forecasts, demonstrate whether Fund T and Fund U are currently priced to fall directly on the security market line (SML), above the SML, or below the SML. c. According to your analysis, are Funds T and U overvalued, undervalued, or properly valued?Assume that you manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 42%. The T-bill rate is 6%. Your client chooses to invest 85% of a portfolio in your fund and 15% in a T-bill money market fund. Required: a. What are the expected return and standard deviation of your client's portfolio (Round your answers to 1 decimal place.) Expected return Standard deviation b. Suppose your risky portfolio includes the following investments in the given proportions: 26% 35 39 Stock A Stock B Stock C What are the investment proportions of your client's overall portfolio, including the position in T-bills? (Round your answers to 1 decimal place.) Security T-Bills Stock A Stock B Stock C % per year % per year Investment Proportions % % % %