What is commonly used to approximate the risk-free rate of return? Acronyms Calculator A. Treasury bonds. B. Treasury bills. C. Bank prime rate. D. Federal funds rate. Progress O Ca Section Candidate: SHARMA Hima STU Fund systematically rebalances its portfolios to the long-term target asset mixes whenever an asset class deviates more than 5% from the targets. What type of asset allocation strategy is STU Fund using? Acronyms Calculator A. Strategic. B. Integrated. C. Dynamic. D. Tactical. Next QueNG
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- What will happen if two assets are earning the same expected return, but one is riskier than the other?Explain what is meant by ESG and the advantages and disadvantages of using ESG considerations when planning and structuring portfolios1. Explain the difference between Initial Margin and Maintenance margin in stock trading.
- Which combination maximises excess portfolio expected return per unit of risk? What is the economic interpretation for this combination?For a well diversified portfolio, ranking of portfolios as per Sharpe’s measure and Treynor’s measure a. Will be different b. Will be identical c. Can’t say d. Ranking as per Sharpe will be more accurateYou have decided to invest in an open-end mutual fund. You are currently looking at a fund-Washington Premier Fund-in your newspaper. The fund is quoted as: Name NAV Net Chg YTD %RET 36.25 0.15 6.95 Assume that today's opening price of Washington Premier Fund equals yesterday's closing price. If you wanted to make your investment first thing this morning, then you should expect to pay for each share of since it Yesterday, each share of sold for $35.95 $43.50 $36.25 $34.44 $0.15 less $0.15 more $6.95 less $6.95 more If you had $8,000 available to invest, you could purchase than it did the day before, and offers a return of 294 368 assesses a 0.15% fee 276 shares of. is a no-load fund charges a 6.95% fee 221 Your evaluation of the Washington Premier Fund is made easier by the fact that: your investment choices are limited. mutual funds are careful to explicitly state their investment objectives. a mutual fund broker will select a customized mix for you. 0.15% 36.25% 6.95% for the year.
- Hi can you help me with this one please. Thank you. 1. Evaluate at least THREE money-market instruments based on risk and rate of return (explain well). Which one would you invest in? Why?Many retirement funds charge an administrative fee each year equal to 0.25% on managed assets. Suppose that Alexx and Spenser each invest 5,000 in the same stock this year. Alexx invests directly and earns 5 a year. Spenser uses a retirement fund and earns 4.75. After 30 years, how much more will Alexx have than Spenser?Q2. Asset Allocation The company's pension plan is managed by Castle Fund Managers, a leading provider of pension services. It is a defined contribution plan, where the employees' contributions are matched by the employer. Each employee had to choose one of the following investment options for their individual plans: a. Preferred Accumulator (PA): Short-term focusb. Balanced Accumulator (BA): Medium-term focus c. Select Accumulator (SA): Long-term focus However, there has been some concern raised over how the pension fund is being managed. Some employees are upset that Castle Fund Managers uses a diversified asset allocation strategy for its investment. Illustrate a short report which explains: a. The importance of strategic asset allocation,b. Three (3) benefits of using this approach,c. Three (3) factors that could affect how assets are allocated.
- D&R A3 6-1 Question 6. VAR Calculation A firm has a portfolio composed of stock A and B with normally distributed returns. Stock A has an annual expected return of 15% and annual volatility of 20%. The firm has a position of $100 million in stock A. Stock B has an annual expected return of 25% and an annual volatility of 30% as well. The firm has a position of $50 million in stock B. The correlation coefficient between the returns of these two stocks is 0.3. What is the 5% daily VAR for the portfolio? Assume 365 days per year.D&R A3 6-1 Question 6. VAR Calculation A firm has a portfolio composed of stock A and B with normally distributed returns. Stock A has an annual expected return of 15% and annual volatility of 20%. The firm has a position of $100 million in stock A. Stock B has an annual expected return of 25% and an annual volatility of 30% as well. The firm has a position of $50 million in stock B. The correlation coefficient between the returns of these two stocks is 0.3. Compute the 5% annual VAR for the portfolio. Interpret the resulting VAR.The table uses the standard deviation of the portfolio's return as a measure of risk. A normal random variable, such as a portfolio's return, stays within two standard deviations of its average approximately 95% of the time. Suppose Valerie modifies her portfolio to contain 75% diversified stocks and 25% risk-free government bonds; that is, she chooses combination D. The average annual return for this type of portfolio is 13%, but given the standard deviation of 15%, the returns will typically (about 95% of the time) vary from a gain of to a loss of