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Unformatted text preview: LostInTime Mutual Fund started the year with a net asset value of $10. By the year end, its NAV equaled $9.50. The fund paid year-end distributions of income and capital gains of $1.50. What was the rate of return to an investor holding LostInTime Mutual Fund shares for the entire year? Chapter 5 3. You manage a risky portfolio with an expected return of 15% and a standard deviation of 25%. The Treasury Bill (risk free) rate is 6%. a. You have a client who invests 60% in your risky portfolio and 40% in Treasury Bills. What is the expected return on your clients complete portfolio? b. For your client described in part (a), what is the standard deviation of her complete portfolio? c. What is the slope of the capital allocation line formed with the risky portfolio and the Treasury Bill? What does that slope mean to you?...
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- Fall '08