if a fund has a annualized volatility of 14.3% (annualized return of 12.88%) and the benchmark...
if a fund has a annualized volatility of 14.3% (annualized return of 12.88%) and the benchmark has a annualized volatility of 14.48% (annualized return of 10.69%), what does this mean? Can you thoroughly explain it?
Homework Answers
From the above information we can see that the annualized volatility of portfolio and benchmark is similar, whereas the annualized return of portfolio is more than benchmark. This shows that due to higher risk or active risk, the return from portfolio is more than benchmark. This also takes into consideration the proportion of the asset differently held by the imvestor against the benchmark.
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if a fund has a annualized volatility of 14.3% (annualized
return of 12.88%) and the benchmark...
You are presently invested in the Luther Fund, a broad based mutual fund that invests in 7. (10 pts.) stocks and other securities. The Luther Fund has an expected return of 14% and a volatility of 20...
You are presently invested in the Luther Fund, a broad based mutual fund that invests in 7. (10 pts.) stocks and other securities. The Luther Fund has an expected return of 14% and a volatility of 20%. Risk-free Treasury bills are currently offering returns of 4%. You are considering adding a precious metals fund to your current portfolio. The metals fund has an expected return of 10%, a volatility of 30%, and a correlation of-20 with the Luther Fund. Will...
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In addition to risk-free securities, you are currently invested in the Tanglewood Fund, a broad-based fund of stocks and other securities with an expected return of 12% and a volatility of 26%. Currently, the risk-free rate of interest is 5%. Your broker suggests that you add a venture capital fund to your current portfolio. The venture capital fund has an expected return of 21%, a volatility of 79%, and a correlation of 0.2 with the Tanglewood Fund. Assume you follow...
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Investment Theory
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Suppose Ford Motor stock has an cxpcctcd return of 20% and a volatility of 40%, and...
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please work all parts. 2. Stock A has expected return of 14% and volatility 30%. Stock...
please work all parts.
2. Stock A has expected return of 14% and volatility 30%. Stock B has expected return of 8% and volatility 19%. The correlation between two stocks is -0.2. The risk free interest rate is 4% (a) Find the expected returns, volatilities, and Sharpe ratios of portfolios that maintain 100.0% investment in Stock A and 100(1-x)% in Stock B, where x is given in the following table. Volatility Expected return Sharpe ratio 0.8 0.9 1.0 (b) How...
The annual return of a well-known mutual fund has historically had a mean of about 10%...
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You are presently invested in the Luther Fund, a broad based mutual fund that invests in 7. (10 pts.) stocks and other securities. The Luther Fund has an expected return of 14% and a volatility of 20%. Risk-free Treasury bills are currently offering returns of 4%. You are considering adding a precious metals fund to your current portfolio. The metals fund has an expected return of 10%, a volatility of 30%, and a correlation of-20 with the Luther Fund. Will...
In addition to risk-free securities, you are currently invested in the Tanglewood Fund, a broad-based fund of stocks and other securities with an expected return of 12% and a volatility of 26%. Currently, the risk-free rate of interest is 5%. Your broker suggests that you add a venture capital fund to your current portfolio. The venture capital fund has an expected return of 21%, a volatility of 79%, and a correlation of 0.2 with the Tanglewood Fund. Assume you follow...
Investment Theory
Consider the following four index funds: 5. Fund A Fund B Fund C Fund D Exp. Return (%) 15 11 16 14 Std. Dev. (% 25 22 25 22 Assume a risk-free rate of 3% a. As a risk averse investor considering both mean return and volatility, which of the funds would you choose to invest in? (on a stand-alone basis) b. Your cousin holds a portfolio of $2 million, invested across stocks and bonds, yielding an annual...
Investment Theory
4. Your current portfolio of $750,000 is fully diversified, yielding an expected monthly return of 0.67% with a monthly return volatility of 2.37%. You expect to inherit $250,000 of company A stock, which has an expected return of 1.25% a month and a monthly return standard deviation of 2.95%. The correlation of stock A with your current portfolio is 0.4. a. Assuming you keep the stock, compute the monthly expected return and standard deviation of the new portfolio...
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please work all parts.
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