Python Exercises for Corporate Finance and Risk Management

12 / 26

Question: 80

Consider a portfolio S with expected return (rs) of 15% and a standard deviation (sd) of 16%. Consider a risk-free asset (T-Bill) with interest rate (rf) of 5%. Compute the correct interval for expected return on a portfolio (rp) with investment proportions ( wi's) of 50% in each of these assets.

  • Define a function with the name "expected_returns" which will take four arguments, expected return on portfolio, interest rate and investment proportion.
  • The signature of the function should be like:

    def expected_returns(expacted_return_s, interest_rate, investment_proportions):

  • Since investment proportion is 50% take values of wi 0.5.

  • Use the following formula to get the value of expected returns:

    Expected returns = (wirs + wirf)

Note - Having trouble with the assessment engine? Follow the steps listed here

Loading comments...