Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. b ir jar forms an aggressive growth portfolio by

b ir Jar forms an aggressive growth portfolio by investing 22% of his...

60.1K

Verified Solution

Question

Finance

image

b

ir Jar forms an aggressive growth portfolio by investing 22% of his savings in Ford stock, 21% in Toyota stock, 23% in Kia stock, 11% in an index fund, and e last 23% is allocated on a bond fund. Assume for simplicity that the index fund is a good proxy to the market portfolio and has a beta equal to 1 , whereas ne bond fund is a good proxy to the riskless asset. The beta of Ford stock is 1.11, the beta of Toyota is 1.43 , and the beta of Kia is 1.76 . If the expected return of the market index is 11% and the risk-free asset yields 7%, what are the beta and the expected return of Jar Jar's portfolio? Give your answer rounded to two decimal places. This question has 2 parts (i.e., you will be clicking "Verify" twice). What is the beta of the portfolio? P=Correctresponse:1.06 Based on the value of P=1.06, what is the expected return of Jar Jar's portfolio? Give your answer rounded to two decimal places. E(rP)=

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

Match each expression to a 5 1 1 1 5 O a Han cut 5...

Medical Sciences
1.2K views

QUESTION 4 True or false? Moderate exercise boosts natural immune functions and host defenses for up to...

General Management
1.2K views

Case Study Read the case then answer the three questions below: Frank became chief financial officer and...

Accounting
1.2K views

Becky Gonzalez (a factory worker) earns $ .50 for every unit she makes up to 200...

Geometry
1.2K views

4 Write a congruence statement remember order is important and state the appropriate postulate SSS...

Basic Math
1.2K views

While on a beach your friend discovers a different genie This genie also offers two...

Basic Math
1.2K views

Select the three prepositional phrases Spanning 17 098 242 square kilometers of land and water...

Algebra
1.2K views

Write the first five terms of the arithmetic sequence whose first term is 9, and...

Accounting
1.2K views

At year-end (December 31), Chan Company estimates its bad debts as 0.40% of its annual...

Accounting
1.2K views

Bond prices are quoted as a percentage of the face value of the bonds. Qui...

Finance
1.2K views

As an option goes deep and deeper into the money, and the instrinc value increases?...

Accounting
1.2K views

Required Use the following information to prepare a classified balance sheet for Alpha Company at...