Portfolio Expected Return

Get your Assignment in a Minimum of 3 hours

Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.

Free Inquiry Order A Paper Now Cost Estimate

Consider the following portfolios:

Portfolio Expected Return

Covariance with A

Covariance with B

Covariance with C

A 3% 0.36 -1.44 0 B 11% -1.44 5.76 2.35 C 16% 0 2.35 1.96

a) Find the expected return and volatility of a portfolio that consists of a long position of $8,000 in

portfolio A and a long position of $2000 in portfolio B. b) Given your answer from part a), what is the risk-free rate in this economy? c) When combined with a risk-free investment, which of the three risky portfolios would suit a risk-

averse investor? Which portfolio would a risk-seeking investor choose? d) Suppose an investor had a required return of 20%. Assume the investor can only invest in the

three portfolios (no risk-free bonds are available, but it is possible to short-sell portfolios). What weights (percentages) of A, B and C would give the investor the required return for the lowest risk?

"Is this question part of your assignment? We Can Help!"

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now

"Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!"

Get Started