Suppose that you have $1 million and the following two opportunities from which to construct...

70.2K

Verified Solution

Question

Accounting

Suppose that you have $1 million and the following two opportunities from which to construct a portfolio:

  1. Risk-free asset earning 9% per year.

  2. Risky asset with expected return of 33% per year and standard deviation of 43%.

If you construct a portfolio with a standard deviation of 34%, what is its expected rate of return? (Do not round your intermediate calculations. Round your answer to 1 decimal place.)

Expected return on portfolio %

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