Author Question: The Horizons Bull Plus Fund seeks daily investment results that correspond to two times (200) the ... (Read 115 times)

Charlie

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The Horizons Bull Plus Fund seeks daily investment results that correspond to two times (200) the daily performance of the S&P 500 Index.
 
  If you wanted to build a portfolio out of T-Bills and the S&P Index to mimic the performance of the Bull Plus Fund, then what are the portfolio weights? Assume that the expected return on the S&P index is 10, the risk free rate is 4.
  A) wS&P = 1.5 and wT-Bill = -0.5
  B) wS&P = 1.67 and wT-Bill = -0.67
  C) wS&P = 2 and wT-Bill = -1
  D) wS&P = 2.33 and wT-Bill = -1.33
  E) wS&P = 2.67 and wT-Bill = -1.67

Question 2

Determination of safety stock involves a trade-off between the risk of a stock-out and increased
  costs of carrying additional inventory.
 
  Indicate whether the statement is true or false



kmb352

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Answer to Question 1

E

Answer to Question 2

TRUE



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