Solved: What is the expected return on the mutual fund, Finance Basics

+44 141 628 6080
[email protected]

What is the expected return on the mutual fund

Task: Capital Allocation

Consider the following capital market: a risk-free asset yielding 3.00% per year and a mutual fund consisting of 65% stocks and 35% bonds. The expected return on stocks is 12.00% per year and the expected return on bonds is 5.50% per year. The standard deviation of stock returns is 30.00% and the standard deviation of bond returns 19.00%. The stock, bond and risk-free returns are all uncorrelated.

1. What is the expected return on the mutual fund?

2. What is the standard deviation of returns for the mutual fund?

View Complete Question

Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the expected return on the mutual fund

Reference No:- TGS02074110

Now Priced at $20 (50% Discount)

Recommended (98%)

Rated (4.3/5)

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Asked Questions

Discussion about the nature versus nurture

In our readings, we learn more about the nature versus nurture argument. For this discussion, I want you to go in depth a bit more and debate the importance

Discussion about gender stereotyping

Prior to your taking this graduate HR law class you had heard of the term "gender stereotyping," but didn't know much about it.

Provide reasons why working from a person centred

Provide five (5) reasons why working from a person centred, strengths-based positive framework, and providing positive lifestyle strategies can reduce

How ensure that the youth understand what study involves

What is another way to say ". It is important to ensure that the youth understand what the study involves, what their participation entails

Discuss three ethical guidelines that are important

Identify and discuss three ethical guidelines that are important to consider when designing an 8-week group for adolescents who are referred

Discuss social worker working with foster children

You are a social worker working with foster children. You are making a home visit to Katie, age nine, and her foster family.

Problem on journal articles and non-journal materials

Amanda said? Excellent post, Chrystal. You provided great insight into the helpful resource ERIC digital library is. I appreciate how it states the information

Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the expected return on the mutual fund

Reference No:- TGS02074110

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Compute the total occupancy cost

Q : What could be the risks associated with the aggressive plan

Q : Requiring a compensating balance

Q : Create an appropriate research approach and design

Q : What is the expected return on the mutual fund

Q : Financial markets around the world

Q : Why is integrated approach necessary for effective treatment

Q : How much advertising cost is allocated to department

Q : Is student loan really a convenient choice for students