fin416 ch 6 and 7 notes

fin416 ch 6 and 7 notes - #’s 13-19 You manage a risky...

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A=aversion, lower likes risk, higher dislikes risk U= utility, which is risk, someone who is risk aversion A=3 (doesn’t like risk), 60% in risky, 40%, in risk free, Column A4, and B4 Y star=100% in Rf---money you should invest What’s the best in column F
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Unformatted text preview: #’s 13-19 You manage a risky portfolio with expected rate of return of 18% and SD of 28%, T-bill is 8% .7(18)+.3(8)= 8%+0.7 [18-8]=15% Sigma p= 0.7x28%= 19.6% Equations 6.2 and 6.4 Sharp ratio, reward for taking risk?...
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This note was uploaded on 06/29/2011 for the course FIN 322 taught by Professor Zhu during the Spring '11 term at Oakland University.

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