Risk

P6–8 Risk-free rate and risk premiums  The real rate of interest is currently 3%; the inflation expectation and risk premiums for a number of securities follow. Inflation expectation Security Premium Risk premium A  6% 3% B  9 2 C  8 2 D  5 4 E 11 1 a. Find...

Risky portfolio

Ben wants to design a risky portfolio from two funds, Momentum Fund and Value Fund. Momentum Fund has an expected return of 35% and a standard deviation of return of 40%. Value Fund has an expected return of 20.5% and a standard deviation of return of 23.5%. What is...