{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chap 10 - 6 Assume that the expected rate of return on the...

This preview shows pages 1–3. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 6. Assume that the expected rate of return on the market portfolio is 23% and the ' rate of return on T—bills (the risk-free rate) is 7%. The standard deviation of the market is 32%. Assume the market portfolio is efﬁcient. a. What is the equation of the of the capital market line? b. i. If an expected return of 39% is desired, What is the standard deviation of this position. ii. If you have \$1,000 to invest, how should you allocate it to achieve the above position? c. If youinvest \$300 in the risk-free asset and \$700 in the market portfolio, how much should you expect to havé at the rand nFﬂm Vac-gr? J h... 7m. GIN“ LT-Suﬁ'tond “'3 GML. - V . , " " “—'—-" «31.. 0.0.7 *7 0'23_9'°7‘£Q’rp .n 0'3). “=7 ens-9:0“) Jpooo «H— .n _-_ ‘ -~_ N05“ \$52000 . 131.. mam}: Pog‘ﬁomo , (9...). I m _. _ u-.— _ _ _ V _/&AT. _0' 30 . n . (page 0-70 _ _ [*{S 97130 (M7) H 0 "7.0) (.0.- .133 _________~_‘-_\_32— ._-... h m ___._ __-§19_<.>2_ L_.___[r1:&1 _ .._ 10.90 3:52.15: . :: ___- _: K \. \SZ 3 ...
View Full Document

{[ snackBarMessage ]}

Page1 / 3

Chap 10 - 6 Assume that the expected rate of return on the...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online