In addition to risk-free securities, you are currently invested in the Tanglewood Fund, a broad-based fund of stocks and other securities with an expected return of 12.00 % and a volatility of 25.00 %. Currently, the risk-free rate of interest is 4.00 %. Your broker suggests that you add a venture capital fund to your current portfolio. The venture capital fund has an expected return of 20.00 % , a volatility of 80.00 % , and a correlation of 0.20 with the Tanglewood Fund. Calculate the required return and use it to decide whether you should add the venture capital fund to your portfolio.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “In addition to risk-free securities, you are currently invested in the Tanglewood Fund, a broad-based fund of stocks and other securities ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
A company is considering purchasing a machine for $21,000. The machine will generate an after-tax net income of $2,000 per year. Annual depreciation expense would be $1,500. What is the payback period for the new machine? a. 4 years. b. 6 years. c.
Answers (1)
What is the duration of a two-year bond that pays an annual coupon of 10 percent and whose current yield to maturity is 11 percent? Use $1,000 as the face value. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e. g.
Answers (1)
Camellia, a merchandising company, has provided the following extracts from their budget for the first quarter of the forthcoming year: 500,000
Answers (1)
Your company plans to borrow $12 million for 12 months, and your banker gives you a stated rate of 21 percent interest. Calculate the effective rate of interest for the following types of loans. a.
Answers (1)
Seymour owns 3 acres of beautiful waterfront property on a large inland lake. In his will, Seymour donates the land to the state with the understanding that the land will be used as a state beach.
Answers (1)
New Questions in Business
Before the invention of railroads, city neighborhoods contained a mix of different people because everyone:
Answers (1)
Lorraine invested $50,000 in a nonqualified deferred annuity at the age of 50. Three years later, the contract has grown to $64,000, and Lorraine takes a $5,000 withdrawal. The contract is still in its accumulation stage.
Answers (1)
William was a factory worker in the 1920s. his company trained him in the exact sequence of steps he needed to make each day so that he would work to maximum productivity. william's company was using the principles of
Answers (1)
In addition to risk-free securities, you are currently invested in the Tanglewood Fund, a broad-based fund of stocks and other securities with an expected return of 12.00 % and a volatility of 25.00 %. Currently, the risk-free rate of interest is 4.
Answers (1)
Suppose that you have placed money in 2 funds: fund a and fund b. fund a accumulates at 9% effective and fund b at 8% effective. at the end of 10 years, the total of the two funds is 52,000.
Answers (1)