subject
Business, 01.03.2021 21:50 ace6112

A risky asset P has expected return 15% and standard deviation 20%. The rate ofreturn on risk-free Treasury bills is 5%. Find the optimal portfolio of an investor with preferences given by: U= E(r)- σ^2

in each of the following cases:

a. borrowing to buy P on margin is possible at a rate of 5%.
b. borrowing to buy P on margin is possible at a rate of 10%.

ansver
Answers: 1

Another question on Business

question
Business, 21.06.2019 21:30
The following balance sheet for the los gatos corporation was prepared by a recently hired accountant. in reviewing the statement you notice several errors. los gatos corporation balance sheet at december 31, 2018 assets cash $ 44,000 accounts receivable 86,000 inventories 57,000 machinery (net) 122,000 franchise (net) 32,000 total assets $ 341,000 liabilities and shareholders' equity accounts payable $ 54,000 allowance for uncollectible accounts 7,000 note payable 59,000 bonds payable 112,000 shareholders' equity 109,000 total liabilities and shareholders' equity $ 341,000 additional information: cash includes a $22,000 restricted amount to be used for repayment of the bonds payable in 2022. the cost of the machinery is $194,000. accounts receivable includes a $22,000 note receivable from a customer due in 2021. the note payable includes accrued interest of $7,000. principal and interest are both due on february 1, 2019. the company began operations in 2013. income less dividends since inception of the company totals $37,000. 52,000 shares of no par common stock were issued in 2013. 200,000 shares are authorized. required: prepare a corrected, classified balance sheet. (amounts to be deducted should be indicated by a minus sign.)
Answers: 2
question
Business, 22.06.2019 01:20
What cylinder head operation is the technician performing in this figure?
Answers: 1
question
Business, 22.06.2019 06:00
List three careers that require knowledge of science. list three careers that require the use of of math. list three careers that require the use of foreign language. list three careers that require the use of good writing skills. list three careers that require the use of good computer skills.
Answers: 3
question
Business, 22.06.2019 21:10
The blumer company entered into the following transactions during 2012: 1. the company was started with $22,000 of common stock issued to investors for cash. 2. on july 1, the company purchased land that cost $15,500 cash. 3. there were $700 of supplies purchased on account. 4. sales on account amounted to $9,500. 5. cash collections of receivables were $5,500. 6. on october 1, 2012, the company paid $3,600 in advance for a 12-month insurance policy that became effective on october 1. 7. supplies on hand as of december 31, 2010 amounted to $225. the amount of cash flow from investing activities would be:
Answers: 2
You know the right answer?
A risky asset P has expected return 15% and standard deviation 20%. The rate ofreturn on risk-free T...
Questions
question
Social Studies, 18.09.2019 15:30
question
Mathematics, 18.09.2019 15:30
question
Mathematics, 18.09.2019 15:30
question
Biology, 18.09.2019 15:30
question
History, 18.09.2019 15:30