EC3333 MidTermPaper2009Spring

EC3333 MidTermPaper2009Spring - EC3333 NATIONAL UNIVERSITY...

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EC3333 NATIONAL UNIVERSITY OF SINGAPORE EC3333 FANANCIAL ECONOMICS I: MID-TERM (SEMESTER II : AY2008-2009) Time Allowed: 1.5 Hours INSTRUCTIONS TO CANDIDATES 1. This examination paper contains 4 questions and comprises 6 printed pages including this front page. 2. Answer all questions. 3. Total marks are 30 . 4. Use answer papers to answer questions. Write down your Matriculation Number, Name and Tutorial Group Number on your answer paper. 5. This is an OPEN BOOK examination.
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EC3333 2 1. (10 marks) There are two assets that are available for an investor to construct his portfolio: A risky asset with an expected return of 0.13 and a standard deviation of 0.03, and a risk-free T-bill that delivers a 6-percent return. (a) Suppose the investor invests 20 percent of his wealth in the risky asset and 80 percent in the T-bill. What are the expected return and standard deviation of his portfolio? (1 marks) (b) Write down the expression for the Capital Allocation Line? (2 marks) (c) Suppose the utility function of the investor is
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This note was uploaded on 10/30/2011 for the course ECON EC3333 taught by Professor Lu during the Spring '11 term at National University of Singapore.

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EC3333 MidTermPaper2009Spring - EC3333 NATIONAL UNIVERSITY...

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