Asked by Joshua Rieser on Jun 29, 2024
Verified
The following data are available relating to the performance of Seminole Fund and the market portfolio:
The risk-free return during the sample period was 6%.
If you wanted to evaluate the Seminole Fund using the M2 measure, what percent of the adjusted portfolio would need to be invested in T-Bills?
A) -36% (borrow)
B) 50%
C) 8%
D) 36%
E) 27%
M2 Measure
A broad measurement of a country's money supply that includes cash, checking deposits, and easily convertible near money, such as savings deposits and money market securities.
T-Bills
Short-term government securities with maturity periods of one year or less, considered a safe and liquid investment.
- Understand the technique for determining the cumulative superior returns of managed investment portfolios.
Verified Answer
ZK
Zybrea KnightJul 06, 2024
Final Answer :
E
Explanation :
22/30 = .7333, or 73.33% invested in Seminole Fund and 1 - 73.33% = 26.67% in T-Bills.
Learning Objectives
- Understand the technique for determining the cumulative superior returns of managed investment portfolios.