You estimate that a passive portfolio, that is, one invested in a risky portfolio that mimics the s& p 500 stock index, yields an expected rate of return of 12% with a standard deviation of 25%. you manage an active portfolio with an expected return of 19% and a standard deviation of 32%. the risk-free rate is 7%. your client's degree of risk aversion is a = 3.3.

a.
if he chose to invest in the passive portfolio, what proportion, y, would he select? (do not round intermediate calculations. round your answer to 2 decimal places. omit the "%" sign in your response.)

proportion of y %? ?

b. what is the fee (percentage of the investment in your fund, deducted at the end of the year) that you can charge to make the client indifferent between your fund and the passive strategy affected by his capital allocation decision (i. e., his choice of y )? (do not round intermediate calculations. round your answer to 1 decimal place. omit the "%" sign in your response.)

fee % per year

Suzanna decided not to pay federal income tax, saying that paying federal income tax is optional. describe two possible consequences of suzanna’s decision

< back to assignment attempts: 1 1 keep the highest: 1 / 2 2. determining opportunity cost juanita is deciding whether to buy a suit that she wants, as well as where to buy it. three stores carry the same suit, but it is more convenient for juanita to get to some stores than others. for example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $102 for the suit: store travel time each way price of a suit (minutes) (dollars per suit) local department store 15 102 across town 30 88 neighboring city 60 65 juanita makes $42 an hour at work. she has to take time off work to purchase her suit, so each hour away from work costs her $42 in lost income. assume that returning to work takes juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. as you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling. complete the following table by computing the opportunity cost of juanita's time and the total cost of shopping at each location. store opportunity cost of time price of a suit total cost (dollars) (dollars per suit) (dollars) local department store 102 across town 88 neighboring city 65 assume that juanita takes opportunity costs and the price of the suit into consideration when she shops. juanita will minimize the cost of the suit if she buys it from the . grade it now save & continue continue without saving

Your parents have accumulated a $170,000 nest egg. they have been planning to use this money to pay college costs to be incurred by you and your sister, courtney. however, courtney has decided to forgo college and start a nail salon. your parents are giving courtney $20,000 to her get started, and they have decided to take year-end vacations costing $8,000 per year for the next four years. use 8 percent as the appropriate interest rate throughout this problem. use appendix a and appendix d for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. how much money will your parents have at the end of four years to you with graduate school, which you will start then?