The expected rates of return on portfolios A and B are 11% and 14%, respectively. The beta of A is 0.8 and the beta of B is 1.5. The T-bill rate is currently 6%, while the expected rate of return on S&P500 index is 12%. The standard deviation of portfolio A is 10% annually, while that of B is 31%, and that of the index is 20%. If you currently hold a market index portfolio, would you choose to add either of these portfolios to your holdings? Discuss your answer.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The expected rates of return on portfolios A and B are 11% and 14%, respectively. The beta of A is 0.8 and the beta of B is 1.5. The T-bill ...” 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
Kevin Bacon is thinking about buying an investment. The investment option that he is thinking about buying is a written pledge by a corporation to repay a specified amount of money. It also pays interest payments every 6 months until it matures.
Answers (1)
Firms that act as financial intermediaries match households that have excess funds with firms that want to borrow funds. What other key services does the financial system provide to savers & lenders? a.
Answers (1)
If you are marketing to high tech customers, which criteria are most important to them in order of importance?
Answers (1)
The demand for most agricultural products tends to be a. Both price and income elastic b. Both price and income inelastic c. Price inelastic and income elastic d. Price elastic and income inelastic e.
Answers (1)
Kevin was not enrolled in school, nor did he have a job that required mathematical skills or reasoning, yet he spent several nights a week reading and solving problems in an old calculus textbook.
Answers (1)
New Questions in Business
Pinto Corp. sells $300,000 of bonds to private investors. The bonds have a 4% coupon rate and interest is paid semiannually. The bonds were sold to yield 5%. What periodic interest payment does Pinto make to its investors? A. $6,000 B. $5,000 C.
Answers (1)
Unearned Rent Revenue is A. a revenue account. B. reported as a current liability. C. a contra account to Rent Revenue. D. debited when rent is received in advance.
Answers (1)
Lagos in the 20th century and Accra in the 21st century began benefitting from a new source of international earnings that enriched each nation's economy. What industry was responsible for those new earnings?
Answers (1)
Vineyard Corporation, a manufacturer of fine wines, began the year with 20,000 bottles in inventory. The company estimated the budgeted sales for the four quarters of the current year to be 200,000 bottles, 150,000 bottles, 250,000 bottles, and
Answers (1)
Chegg "Thurman Corporation issued 500,000 shares of $0.50 par value capital stock at its date of incorporation for cash at a price of $2.5 per share. During the first year of operations, the company earned $180,000 and declared a dividend of $45,000.
Answers (1)