QUESTION 6 You manage a portfolio (call it P) that has an expected return of 15%

Question

QUESTION 6 You manage a portfolio (call it P) that has an expected return of 15% with a standard deviation of 25% The current risk-free rate is 6% Portfolio Pis comprised ofthree sector funds A, B, and C. The percent invested in the various sectors is as follows 30% in sector .d; 50% in sector B: 20% in sector C Another client wishes to invest an amount in your portfolio (remainder in the risk-free asset) so that the expected neturn of her portfolio is equal to 14 percent. The percent to invest in portolio P is closest to 2096. 30%. o 4096. o 67%. QUESTION 7 The financial statements of Tennessee Tractor Company are given below

Explanation / Answer

at option d. 67% expected return matches 14% of expected return

weight return weighted return a b c=a*b 66.67% 18% 0.12 33.33% 6% 0.02 Expected return 0.14

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