Mathematics, 10.09.2020 02:01 lalaween098
Given that the risk-free rate is 10%, the expected return on the market portfolio is 20%, and the standard deviation of returns to the market portfolio is 20%, answer the following questions:a. What is the slope of the capital market line?\(Expected Return – Risk Free Rate) / Standard Deviation(20% - 10%) / 20%= .5b. You have $100,000 to invest. How should you allocate your wealth among risk free assets and the market portfolio in order to have a 25% expected return?A * 0. 10 + (100000 - A) * 0. 20 = 0.25 * 1000000.10 A + 20000 - 0.20 A = 25000- 0.10 A = 5000A = - 50,000Borrow 50,000 at 10% and invest it in the market portfolio at 25% return. c. What is the standard deviation of your portfolio in b)?The standard deviation of returns to the market portfolio is 20% therefore the Standard deviation of my portfolio is also 20%d. What is the correlation between the portfolio in b) and the market portfolio?e. Suppose that the market pays either 40% or 0% each with probability one half. You alter your portfolio to a more risky level by borrowing $50,000 and investing it and your own $100,000 in M. Give the probability distribution of your wealth (in dollars) next period.
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The first floor of marcus’ house is 1,440 square feet. he will cover 1,033 square feet with wood and the rest with tile. a box of tiles will cover 11 square feet. how many boxes of tile does marcus need to buy to cover the floor?
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Given that the risk-free rate is 10%, the expected return on the market portfolio is 20%, and the st...
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