Expected return of the portfolio
WebAssume that the market only offers two risky assets: Fund F and Stock B. Fund F has an expected return of 14% with a volatility of 20%.The risk-free rate is 3.8%.Stock B has an expected return of 20%, a volatility of 60% and a correlation of 0 with Fund F. (a) Is Fund F the optimal risky portfolio? (b) You did some calculation and decide that the optimal … WebThe expected return of the portfolio is calculated by aggregating the product of weight and the expected return for each asset or asset class: Expected return of the investment portfolio = 10% * 7% + 60% * 4% + 30% * 1% = 3.4% You can also copy this example into Excel and do an individual calculation for your investments. Conclusion
Expected return of the portfolio
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WebExpected Return = Risk Free Rate + Beta* ( Expected Market Return - Risk Free Rate) market risk premium = Expected Market Return - Risk Free Rate 0.156 = 0.062+ b … WebYou have a portfolio consisting solely of stock A and stock B. The portfolio has an expected return of 9.8 percent. Stock A has an expected return of 11.4 percent while stock B is expected to return 6.4 percent. What is the portfolio weight of stock A? -59 percent -87 percent -68 percent -81 percent -74 percent Click the card to flip 👆 68 percent
WebThe expected return on a portfolio: I. can never exceed the expected return of the best performing security in the portfolio. II. must be equal to or greater than the expected return of the worst performing security in the portfolio. III. is independent of the unsystematic risks of the individual securities held in the portfolio. WebFeb 17, 2024 · Portfolio Expected Return = $200,000 divided by $1 million, times 10%. So, for the "heaviest-weighted (most invested) asset," you get an expected return of 4%; for the second, least...
WebThe _____ return on a portfolio is a combination of the expected returns on the assets in the portfolio. expected True or false: The expected return is the return that an investor expects to earn on a risky asset in the future. True The true risk of any investment comes from: -surprises-unanticipated events Webwhat is expected return of the following portfolio of investments, investment expected return amount invested DEF 4% $30,000 JKL 24% $25,000 TUV 14% $45,000 This …
WebThe portfolio’s expected return is just the weighted average of the expected return of the assets in the portfolio; however, in addition to individual standard deviations, the effect of the covariance between the returns of the assets has to be accounted for.
WebTrue. One key conclusion of the Capital Asset Pricing Model is that the value of an asset should be measured by considering both the risk and the expected return of the asset, assuming that the asset is held in a well-diversified portfolio. The risk of the asset held in isolation is not relevant under the CAPM. True. lighthouse digest archivesWebA: The process that analyzes and evaluates the feasibility of an investment is recognized as capital…. Q: Net cash flow Discount Factor = 1/ ( (1+r)^n) Present value of the cash … lighthouse dictionaryWebexpected return of the portfolio, ep, will then be: ep = x1*e1 + x2*e2 Since the proportions will sum to 1.0 we may also write: ep = e1 + x2*(e2-e1) The variance of the portfolio, vp, will be a function of the … peachonline/ipadWebWhat is the beta for a portfolio with an expected return of \( 12.5 \% ? \) 0.5 1 1.5 2 Question: What is the beta for a portfolio with an expected return of \( 12.5 \% ? \) 0.5 1 1.5 2 Show transcribed image text lighthouse dewey menuWebMar 15, 2024 · A complete portfolio is defined as a combination of a risky asset portfolio, with return R p, and the risk-free asset, with return R f. The expected return of a complete portfolio is given as: E(R c) = w p E(R p) + (1 − w p)R f. And the variance and standard deviation of the complete portfolio return is given as: Var(R c) = w 2 p Var(R p), σ ... lighthouse dfwWebApr 14, 2024 · A portfolio’s expected return represents the combined expected rates of return for each asset in it, weighted by that asset’s significance. It tells you what to … peachonline.net/ipadWebOverall expected return = ( 70/100 × 8%) + (30/100 × 5%) = 7.1% 7.1% A portfolio is composed of 30% stock, 20% bonds, and 50% mutual funds. The stock is expected to have a 10% return, the bonds a 5% return and the mutual funds a 7% return. What is the expected return of the portfolio? 7.3% 7% 8.1% 7.5% lighthouse destiny