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A Portfolio Consists of Two Securities: a 90-Day T-Bill and the S&P/TSX

question 110

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A portfolio consists of two securities: a 90-day T-bill and the S&P/TSX Composite.The expected return on the T-bill is 4.5 percent.The expected return of the S&P/TSX Composite is 18 percent with a standard deviation of 30 percent.What is the portfolio expected return if the standard deviation for this portfolio is 50 percent?


Definitions:

Tax Revenue

The revenue acquired by governments via tax collection.

FICA

The Federal Insurance Contributions Act tax, a United States federal payroll (or employment) tax imposed on both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, people with disabilities, and children of deceased workers.

Federal Insurance Contributions Act

A U.S. law that requires employees to contribute to Social Security and Medicare, with matching contributions from employers.

Burden Of The Tax

The impact of a tax on the economic welfare of individuals, showing who ultimately bears the cost of the tax.

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