Three friends each own portfolios consisting of a diversified stock index fund and short term risk-free Treasury bills.

4. Three friends each own portfolios consisting of a diversified stock index fund and short term risk-free Treasury bills. The risk-free rate of return is Rf = 4% and the stock market index fund has an expected return of Rmbar = 10% with a standard deviation of σm = 6%.
For each friend, find the portfolio weights for each investment (wm and wrf ), the expected portfolio rate of return, and the portfolio standard deviation of return.
a (12). Tanya has $50,000 to invest. She purchases $30,000 in stocks, and puts the rest into T-bills.
b. (12) Bruce has $25,000 to invest. He borrows an extra $20,000 from his broker at the risk-free rate, and puts all the funds into stocks.
c. (12) Camille has $9000 to invest. She puts all her funds in risk-free T-bills.
d. (14) Suppose after the friends invest, a recession occurs and the actual stock market return is -20%. What rate of return will each friend actually earn in this circumstance? Whose portfolio performed best?

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

New Year Offers! Enjoy 10% OFF this January using the coupon code: best10