Portfolio Management

Tagged: 

  • This topic has 1 reply, 2 voices, and was last updated 7 months ago by Madhu Chandarasekaran, CFA.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • September 24, 2024 at 6:49 am #8769
    Kaaviya CFA
    Participant
    An investors portfolio is 60%financed with debt borrowed at the risk free rate of 4%. The portfolio is fully invested in an S&P 500 ETF, with an expected return of 11% and std deviation of 28%. Wh
    September 24, 2024 at 9:15 am #8771
    Madhu Chandarasekaran, CFA
    Keymaster
    This is a leveraged portfolio return question, so the Return of the portfolio is given by the formula:

    Rp = w1*Rb +(1-w1)*Rm

    w1 = -0.6 | Rb = 0.04 | Rm = 0.11

    =(-0.6*0.04) + (1.6 * 0.11)   = -0.0

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.