You estimate that a passive portfolio, that is, one invested in a risky portfolio that mimics the S&P500 stock index that represents the stock market, yields an expected rate of return of 13% with a standard deviation of 25%. You manage an active portfolio with expected return 18% and standard deviation 28%. The risk-free rate is 8%.
a. Draw the CML (Capital Market Line) and your funds’ CAL (Capital Allocation Line) on an expected return-standard deviation diagram. Indicate their slopes.
b. Suppose your client ponders whether to switch the 70% that is invested in your fund to the passive portfolio. Explain to your client the disadvantage of the switch.
c.In the context of part b, Show him the maximum fee you could charge (as a percentage of the investment in your fund, deducted at the end of the year) that would leave him at least as well of investing in your fund as in the passive one.)
(Hint: The fee will lower the slope of his CAL by reducing the expected return net of the fee.)

Answers

Answer 1

The capital market line with fee will be 0.3771 and the capital allocation line will be 0.24.

How to calculate the slope?

The slope of the capital market line will be:

= (17% - 7% - f)/27

= (10% - f)/27

f = 0.3771

The slope of the capital allocation line will be:

= (13% - 7%) / 25%

= 0.24

The reward to variability ratio will be:

= (17 -7)/27

= 0.3771

The client's reward to variability ratio will be:

= (13 - 7)/25

= 0.25

This shows that the client will be disadvantaged of the switch since it's lower.

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Related Questions

Enter the solution (x, y) to the system of equations shown.


y=4x−3
y=−x−13

Answers

Answer:

x=-2

y=-11

Step-by-step explanation:

4x-3=-x-13

5x-3=-13

5x=-10

x=-2

y=4(-2)-3

y=-11

What are the solution to the equation below? 4x^2+ 9 = 25

Answers

that is the complete answer to the question

What is the area of the obtuse triangle given below?
6, 18

Answers

Answer:

54

Step-by-step explanation:

A = 1/2 bh

A = 1/2 (6)(18)

A = 1/2 (108)

A = 54

Area of the Obtuse triangle whose measures are 6 and 18 is 54 square units.

What is Triangle?

A triangle is a three-sided polygon that consists of three edges and three vertices.

We need to find the area of the obtuse triangle whose base is six units and height is eighteen 18 units.

A triangle whose any one of the angles is an obtuse angle or more than 90° is called Obtuse.

The area of triangle is 1/2×Base×Height

Half base times of height

Area of triangle=1/2×6×18

=54 square units

Area is 54 square units.

Hence, Area of the Obtuse triangle whose measures are 6 and 18 is 54 square units.

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I am a polygon that has two pairs of opposite sides that are parallel what am I

Answers

A Parallelogram because it is a quadrilateral with 2 pairs of parallel sides!

Help picture below problem 12

Answers

Answer:

isosceles triangle is shown in fig

Find the distance between the two points in simplest radical form.
(3,9) and (-2,4)

Answers

Explaination :

Here we would be using distance formula to calculate the distance between those two points.

Points are,

(3 , 9)(-2 , 4)

Distance Formula :

[tex]\huge \large \boxed{\sf{{d \: = \: \sqrt{(x _{2} - x _{1}) {}^{2} \: + \: (y _{2} - y _{1}) {}^{2} }}}} \: \red\bigstar[/tex]

We have :

x1 = 3

x2 = -2

y1 = 9

y2 = 4

Substituting the values :

Refer the attachment.Additional Information :

Centroid of a triangle :-

[tex]\boxed{ \sf{Centroid \: = \: \dfrac{x_1 \: + \: x_2 \: + \: x_3}{3} }} \: \pink\bigstar[/tex]

Midpoint of two points:-

[tex]\boxed{ \sf{M \: = \: \dfrac{x_1 \: + \: x_2 }{2} \: , \: \dfrac{y_1 \: + \: y_2 }{2}}} \: \pink\bigstar[/tex]

1. Mark practices the piano for 2/3 of an hour, 6 times a week. How many hours does
he practice each week?

Answers

Answer:

4 hours

Step-by-step explanation:

2/3*6/1= 12/3

12/3 simplified is 4

Answer: 4 hours each week

Explanation: 2/3 of an hour = 40 minutes
40 times 6 = 240 minutes
240 (minutes) / 6 (hours) = 4 hours practiced each week

Hope this helps :)

Adam earns $36 for every four hours of work how long will it take him to earn $144

Answers

Answer:

It will take 16 hours to earn $144.

Step-by-step explanation:

If Adam earns $36 in 4 hours,

36 = 4k

k = 9

Therefore, expression for total earnings will be,

y = 9x

a). For y = $144,    144 = 9x      x = 16 hours

Using the formula S = P(1 + r)t, where P is the original principal, r is the annual interest rate, and t is the number of years, what is the investment savings, S, if P = $14,500.00, r = 7.5%, and t = 5 years?

Answers

[tex]~~~~~~ \textit{Savings Earned Amount} \\\\ S=P\left(1+r\right)^{t} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\$14500\\ r=rate\to 7.5\%\to \frac{7.5}{100}\dotfill &0.075\\ t=years\dotfill &5 \end{cases} \\\\\\ S=14500\left(1+0.075\right)^{5}\implies S=14500(1.075)^5\implies A\approx 20816.63[/tex]

6. Sam scored 12 points on a math quiz, and he scored 3 points fewer than Alicia. Write an
equation for this situation, and find Alicia's score.

Answers

x - 3 = 12
x = 12 + 3
x = 15

Financial Planning: Purchasing a House
Part One:
1. Download the app Zillow
2. Make an account
3. Make a list of required features
4. Find a house that serves your current and future needs
Part Two:
1. Decide how much money you have for the down payment
2. Calculate how much you need to finance
3. Calculate your monthly payment to mortgage
4. Calculate how long you will be paying off and make a plan
Part Three:
1. Repeat parts one and two more times for a total of 3 potential houses
2. Put them into a graphic organizer and decide which one works best for you.

Answers

The answer is number one (1) download the app Zillow

Can yo solve this ones, please? in adittion, can you put answers and the process. The topic are area down the curve

Answers

1) The net area between the two functions is 2.

2) The net area between the two functions is 4/3.

3) The net area between the two functions is 17/6.

4) The net area between the two functions is approximately 1.218.

5) The net area between the two functions is 1/2.

How to determine the area between two functions by definite integrals

The area between the two curves is determined by definite integrals for a interval between two values of x. A general formula for the definite integral is presented below:

[tex]A = \int\limits^{b}_{a} {[f(x) - g(x)]} \, dx[/tex]   (1)

Where:

a - Lower limitb - Upper limitf(x) - "Upper" functiong(x) - "Lower" function

Now we proceed to solve each integral:

Case I - [tex]f(x) = \sqrt{x}[/tex] and [tex]g(x) = x^{2}[/tex]

The lower and upper limits between the two functions are 0 and 1, respectively. The definite integral is described below:

[tex]A = \int\limits^1_0 {x^{0.5}} \, dx - \int\limits^1_0 {x^{2}} \, dx[/tex]

[tex]A = 2\cdot (1^{1.5}-0^{1.5})-\frac{1}{3}\cdot (1^{3}-0^{3})[/tex]

[tex]A = 2[/tex]

The net area between the two functions is 2. [tex]\blacksquare[/tex]

Case II - [tex]f(x) = -4\cdot x[/tex] and [tex]g(x) = x^{2}+3[/tex]

The lower and upper limits between the two functions are -3 and -1, respectively. The definite integral is described below:

[tex]A = - 4 \int\limits^{-1}_{-3} {x} \, dx - \int\limits^{-1}_{-3} {x^{2}} \, dx - 3 \int\limits^{-1}_{-3}\, dx[/tex]

[tex]A = -2\cdot [(-1)^{2}-(-3)^{2}]-\frac{1}{3}\cdot [(-1)^{3}-(-3)^{3}] -3\cdot [(-1)-(-3)][/tex]

[tex]A = \frac{4}{3}[/tex]

The net area between the two functions is 4/3. [tex]\blacksquare[/tex]

Case III - [tex]f(x) = x^{2}+2[/tex] and [tex]g(x) = -x[/tex]

The definite integral is described below:

[tex]A = \int\limits^{1}_{0} {x^{2}} \, dx + 2\int\limits^{1}_{0}\, dx + \int\limits^{1}_{0} {x} \, dx[/tex]

[tex]A = \frac{1}{3}\cdot (1^{3}-0^{3}) + 2\cdot (1-0) +\frac{1}{2}\cdot (1^{2}-0^{2})[/tex]

[tex]A = \frac{17}{6}[/tex]

The net area between the two functions is 17/6. [tex]\blacksquare[/tex]

Case IV - [tex]f(x) = e^{-x}[/tex] and [tex]g(x) = -x[/tex]

The definite integral is described below:

[tex]A = \int\limits^{0}_{-1} {e^{-x}} \, dx+ \int\limits^{0}_{-1} {x} \, dx[/tex]

[tex]A = -(e^{0}-e^{1}) + \frac{1}{2}\cdot [0^{2}-(-1)^{2}][/tex]

[tex]A \approx 1.218[/tex]

The net area between the two functions is approximately 1.218. [tex]\blacksquare[/tex]

Case V - [tex]f(x) = \sin 2x[/tex] and [tex]g(x) = \sin x[/tex]

This case requires a combination of definite integrals, as f(x) may be higher that g(x) in some subintervals. The combination of definite integrals is:

[tex]A = \int\limits^{\frac{\pi}{3} }_0 {\sin 2x} \, dx - \int\limits^{\frac{\pi}{3} }_{0} {\sin x} \, dx + \int\limits^{\frac{\pi}{2} }_{\frac{\pi}{3} } {\sin x} \, dx -\int\limits^{\frac{\pi}{2} }_{\frac{\pi}{3} } {\sin 2x} \, dx[/tex]

[tex]A = -\frac{1}{2}\cdot (\cos \frac{2\pi}{3}-\cos 0)+(\cos \frac{\pi}{3}-\cos 0 ) -(\cos \frac{\pi}{2}-\cos \frac{\pi}{3} )+\frac{1}{2}\cdot (\cos \pi-\cos \frac{2\pi}{3} )[/tex]

[tex]A = \frac{1}{2}[/tex]

The net area between the two functions is 1/2. [tex]\blacksquare[/tex]

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60 = y-3 divided by 10

Answers

Answer:

y  = 60.3

Step-by-step explanation:

1 point
2. Three boards are unloaded into the factory.
А
B
С
Board A is three times the length of board C, plus 5 inches. Board B is two
times the length of board C, plus 3 inches. The total length of all three boards
is 104 inches. How long is each board?
Your answer
??

Answers

Each side of the board would have to be at least 36

Simplify the expression. 16 • 4–4

a)256
b)–256
c)1/16
d)–4,096

Answers

Answer: C) 1/16

Hope this helps :)

=) A student is taking a standardized test
consisting of multiple choice questions for
which there are five options for each question.
Four points are awarded for each correct
answer, but the student loses 2 points for an
incorrect answer. Questions left blank neither
receive nor lose points. Is it in the student's
best interest to guess?

Answers

Answer:

in this problem. Not that the total number of ways of taking one or more alternative out of ...

Step-by-step explanation:

Answer:

No.

Step-by-step explanation:

Well, honestly not sure how to solve this but I'll try.

Each correct answer is giving 4 points but the probability to choose the correct one is 1/5

Each incorrect one gives -2 points and the chance to pick a wrong answer is 4/5.

Obviously, the chance to lose points is more. But is taking the risk and guessing worth it? Well, it depends on how many points the correct answer gives. If it makes up for the possible loss of points, then it is in his interest to guess, otherwise he will end up losing more than they win.

If we sum the two chances to find averagely how many points the student will get, then I guess that would be the correct answer:

4(1/5) + (-2)(4/5) = 4/5 - 8/5 = -4/5

He will get averagely -4/5 points, so I believe it isn't in his interest. It means that the points he gets don't make up for the possible loss of points if you choose answers randomly. (Wow, I'm glad teachers don't do this on tests 0_0)

This is my theory though, not sure how to go for solving this, just thinked logically. I hope this helps, but don't trust me and copy paste my answer on your test or whatever. Think if this is correct first because I'm not sure

You deposit $2500 into an account that pay 4%. How much is your account after 15 years if compounded continuously?

Answers

Answer:

I think it is 11875

Sorry if im wrong

Hope This Helps

A water storage tank is in the shape of a cone with the pointed end down. If the radius is 21 feet and the depth of the tank is 14 feet, find the volume of the tank in cubic feet. Use 22/7 for π.

Answers

The volume of the water storage tank is the amount of space in it

The volume of the water storage tank is 6468 cubic feet

How to determine the volume?

The given parameters are:

Radius (r) = 21 feet

Height (h) = 14 feet

The shape of the water storage tank is a cone.

And the volume of a cone is:

V = 1/3πr^2h

So, we have:

V = 1/3 * 22/7 * 21^2 * 14

This gives

V = 6468

Hence, the volume of the water storage tank is 6468 cubic feet

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Three students are sitting in a playground to make a circular path. They are sitting on the circumference, the co-ordinates of their position on the circle are (1, 2), (3, 4) and (3, 2). Find the co-ordinates of the point equidistant from their position. Also, find the equation of the locus.​

Answers

The coordinates of the point equidistant from their position is C(x,y) = (2, 3) and the equation of the locus is (x - 2)² + (y - 3)² = 2.

How to derive the equation of the circunference associated with a playground

The center is the point that is equidistant to every point on the circumference. First, we need to determine the coefficients of the general equation of the circle, whose form is described below:

x² + y² + D · x + E · y + F = 0   (1)

We need three distinct points of the circumference to determine one solution.

If we know that (x₁, y₁) = (1, 2), (x₂, y₂) = (3, 4) and (x₃, y₃) = (3, 2), then the system of linear equations is:

D + 2 · E + F = -5   (2)

3 · D + 4 · E + F = - 25   (3)

3 · D + 2 · E + F =  - 13   (4)

The solution of the linear system is D = - 4, E = - 6 and F = 11.

Now we proceed to transform the expression into its standard form by completing the squares:

x² + y² - 4 · x - 6 · y + 11 = 0

( - 4 · x + 4) + (y² - 6 · y + 9) - 2 = 0

(x - 2)² + (y - 3)² = 2

The coordinates of the point equidistant from their position is C(x,y) = (2, 3) and the equation of the locus is (x - 2)² + (y - 3)² = 2.

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QUESTION 1 Which one of the following is an ordered pair? O {-3,5} O (2, 4,0) 0 (0, 6) 0 1,3​

Answers

The ordered pair here in the given is (0,6) because an ordered pair is compose of two coordinates which are the abscissa and ordinate with parenthesis.

meter and Area
1
Casey wants to put new carpet in her bedroom. A drawing of Casey's room is below. It consists of two sections: a square and a
rectangle
The rectangular section has the same width as the square section, but wice the length. If one side of the square section measures 3
yards, how many square yards of carpet should Casey buy for her room?
A 36 square yards
OB 24 square yards
OC 18 square yards
D. 27 square yards

Answers

Answer:

18 square yards

Step-by-step explanation:

because if you do 3x3 twice then add the two numbers you get you will get 18.

pls help me uwuwuwuuwuwuww

Answers

Answer:

128

6

12

48

Step-by-step explanation:

What are the zeros of the function below?
F(x) = 8x(x-6)/(x+2)(x+9)

Answers

Answer:

x = 0, 6

Step-by-step explanation:

8x(x-6) = 0

x = 0, 6


Which economic system has no government involvement in the market?
a capitalism
.. communism
C. socialism
l. No economic system is free from government involvement.
Please select the best answer from the choices provided

Answers

Answer: I.

Step-by-step explanation:

Capitalism is clearly not the answer. Capitalist governments such as America have their fingers into the economic trading.

Socialism and Communism sound plausible, but Communism is giving people money by their work, and Socialism is everything is owned by the public. Both still involve themselves in markets, so the answer is I

Answer:

d.

No economic system is free from government involvement.

Step-by-step explanation:

can somebody explain this to

Answers

Check the picture below.

[tex]slope = m = \cfrac{rise}{run} \implies \cfrac{ f(x_2) - f(x_1)}{ x_2 - x_1}\impliedby \begin{array}{llll} average~rate\\ of~change \end{array}\\\\[-0.35em] \rule{34em}{0.25pt}\\\\ \begin{cases} x_1=0\\ x_2=2 \end{cases}\implies \cfrac{f(x_2)-f(x_1)}{2-0}\implies \cfrac{0~~ - ~~1}{2}\implies -\cfrac{1}{2}[/tex]

Select ALL of the expressions that are equivalent to 4√5.

A. 2√20
B. 6^1/2-5^1/2
c. 3*5^1/2+5^1/2
D.4*5^1/2
E.2√10
F.3*5^1/2

Answers

Answer:

A, C, D


All 3 of those simplfiy to 4√5

Over the last 16 years Johanna saved some of her pay each month. She now has $46,000. She decides to invest some
of it at 5.25% annual interest and the rest at 3.75% annual interest. After one year, her total interest earned from both
accounts is $2001. How much did she invest in each account? (Clearly label which amount is for which account in
your answer.

Answers

The amount invested in the account that gives a 5.25% interest is  $18400.

The amount invested in the account that gives a 3.75% interest is 27600.

What are the linear equations that represent this question?

0.0525a + 0.0375b = 2001 equation 1

a + b = 46000 equation 2

Where:

a = amount invested in the account that gives a 5.25% interest

b = amount invested in the account that gives a 3.75% interest

What is the amount invested in the account that gives a 3.75% interest?

Multiply equation 2 by 0.0525

0.0525a + 0.0525b = 2415 equation 3

Subtract equation 1 from equation 3

414 = 0.015b

b = 27600

What is the amount invested in the account that gives a 5.25% interest ?

Subtract 27600 from 46000

46000  27600 = $18400

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Park
Avenue
Describe the lines that intersect at Park Avenue and Hawthome Boulevard. Explain.

Answers

Answer:

make it clearer

Step-by-step explanation:

I WILL GIVE 20 POINTS TO THOSE WHO ANSWER THIS RIGHT NOOOO SCAMS AND EXPLAIN WHY THAT IS THE ANSWER

Answers

Answer:

160

Step-by-step explanation:

FEJ angle is the large angle and the number in red shows how big it is. Remember the whole thing is 180 degrees.

Ok so the answer is
160°
It is an obtuse angle because it is greater than 90°

Hope this helps :)

A parallelogram has a base of 12 meters and a height of 7 meters. What is the area?

Answers

Answer:

Area = 84 sq meters

Step-by-step explanation:

Area of a parallelogram is:

A = b•h

A = 12•7

A = 84 square meters

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