Homework Answers
Answer: The last option is correct
Combining negatively correlated assets having the same expected
return results in a portfolio with same level of expected return
and a lower level of risk.
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Which of the following statements is most correct? O An inefficient portfolio maximizes return for a...
Assume you are considering a portfolio containing two assets, L and M. Asset L will represent...
Assume you are considering a portfolio containing two assets, L and M. Asset L will represent 36% of the dollar value of the portfolio, and asset M will account for the other 64%. The projected returns over the next six years, 2018–2023, for each of these assets are summarized in the following table. *huge thumbs up for correct answers* Projected Return (%) Year Asset L Asset M 2018 15% 21% 2019 14% 17% 2020 16% 16% 2021 16% 14% 2022...
Assume you are considering a portfolio containing Asset 1 and Asset 2. Asset 1 will represent...
Assume you are considering a portfolio containing Asset 1 and Asset 2. Asset 1 will represent 63% of the dollar value of the portfolio, and Asset 2 will account for the other 37%. The projected returns over t6 years, 2021-2026, for each of these assets are summarized in the following table: a. Calculate the projected portfolio retur, fp, for each of the 6 years. Data Table - X b. Calculate the average expected portfolio return, fp, over the 6-year period....
Assume you are considering a portfolio containing two assets, L and M. Asset L will represent...
Assume you are considering a portfolio containing two assets, L
and M. Asset L will represent 39 % of the dollar value of the
portfolio, and asset M will account for the other 61 %. The
projected returns over the next 6 years, 2018-2023, for each of
these assets are summarized in the following table:
LOADING....
a. Calculate the projected portfolio return, r over p, for
each of the 6 years.
b. Calculate the average expected portfolio return, r over...
Please answer Which of the following statements about portfolio diversifications are correct? Check all that apply....
Please answer
Which of the following statements about portfolio diversifications are correct? Check all that apply. The higher the stocks' correlation coefficients,the lower the portfolio's risk. Stocks with perfectly negatively correlated returns do not exist. By adding enough partially correlated stocks, risk can be completely eliminated The risk of a portfolio declines as the number of stocks in the portfolio increases.
8. Calculate the PORTFOLIO Expected Return and standard deviation of a 60/40 Portfolio of Asset A...
8. Calculate the PORTFOLIO Expected Return and standard deviation of a 60/40 Portfolio of Asset A and asset B. ASSET A 60% ASSET B 40% Return in State Return in State R (A) R(B) PORTFOLIO Rport in Sate S R(P)i Deviation R(P)i Pr Portfolio (Deviation Portfolio 2 State S Squared Dev*Pr Pr State P 0.4 0.6 E(R) E(R) Portfolio Portfolio Var Portfolio sd - 9. Compare the Risk-Return of the two stocks ALONE and the joint risk in the portfolio...
Please respond to both pictures asap. I will THUMBS UP within the hour. 7 8 Eddy's...
Please respond to both pictures asap. I will THUMBS UP within the
hour.
7
8
Eddy's Heating and Cooling has been success in the last four years. Over these years, paid common stock dividends of S4.00 in the first year, 54.20 in the second year, 54.41 in the third year, and its most recent dividend was $4.63. The company wishes to continue this growth indefinitely. What is the value of the company's stock if the required rate of retum is...
All of the following statements regarding diversification are correct EXCEPT? A. diversification is not enhanced by the addition of foreign securities to a portfolio because they are always highly cor...
All of the following statements regarding diversification are correct EXCEPT? A. diversification is not enhanced by the addition of foreign securities to a portfolio because they are always highly correlated with domestic equity. B. to minimize interest rate risk, one could diversify within the fixed-income asset category by staggering bond maturity dates. C. to minimize business risk, one could allocate among a number of asset categories and purchase mutual funds. D. to reduce liquidity risk, one would keep a sufficient...
15. Which of the following statements is True? When creating a complete portfolio by a risky...
15. Which of the following statements is True? When creating a complete portfolio by a risky portfolio and a risk-free asset, a higher allocation to the risky portfolio increases the Sharpe ratio. The lower the risk-free rate, the lower the Sharpe ratios of levered portfolios. With a positive and fixed risk-free rate, doubling the expected return and standard deviation of the risky portfolio will double the Sharpe ratio. Holding constant the risk premium of the risky portfolio, a higher risk-free...
Which of the following statements is FALSE? O A. The required return is the expected return...
Which of the following statements is FALSE? O A. The required return is the expected return that is necessary to compensate for the risk that an investment will contribute to the portfolio B. We should continue to trade securities until the expected return of each security equals its required retum. OC. security is required return exceeds its expected return, then adding more of it will improve the performance of the portfolio OD. The Sharpe ratio of the portfolio tells us...
2. 3: Risk and Rates of Return: Risk in Portfolio Context Risk and Rates of Return:...
2. 3: Risk and Rates of Return: Risk in Portfolio Context Risk
and Rates of Return: Risk in Portfolio Context The capital asset
pricing model (CAPM) explains how risk should be considered when
stocks and other assets are held . The CAPM states that any stock's
required rate of return is the risk-free rate of return plus a risk
premium that reflects only the risk remaining diversification. Most
individuals hold stocks in portfolios. The risk of a stock held in...
Assume you are considering a portfolio containing Asset 1 and Asset 2. Asset 1 will represent 63% of the dollar value of the portfolio, and Asset 2 will account for the other 37%. The projected returns over t6 years, 2021-2026, for each of these assets are summarized in the following table: a. Calculate the projected portfolio retur, fp, for each of the 6 years. Data Table - X b. Calculate the average expected portfolio return, fp, over the 6-year period....
Assume you are considering a portfolio containing two assets, L
and M. Asset L will represent 39 % of the dollar value of the
portfolio, and asset M will account for the other 61 %. The
projected returns over the next 6 years, 2018-2023, for each of
these assets are summarized in the following table:
LOADING....
a. Calculate the projected portfolio return, r over p, for
each of the 6 years.
b. Calculate the average expected portfolio return, r over...
Please answer
Which of the following statements about portfolio diversifications are correct? Check all that apply. The higher the stocks' correlation coefficients,the lower the portfolio's risk. Stocks with perfectly negatively correlated returns do not exist. By adding enough partially correlated stocks, risk can be completely eliminated The risk of a portfolio declines as the number of stocks in the portfolio increases.
8. Calculate the PORTFOLIO Expected Return and standard deviation of a 60/40 Portfolio of Asset A and asset B. ASSET A 60% ASSET B 40% Return in State Return in State R (A) R(B) PORTFOLIO Rport in Sate S R(P)i Deviation R(P)i Pr Portfolio (Deviation Portfolio 2 State S Squared Dev*Pr Pr State P 0.4 0.6 E(R) E(R) Portfolio Portfolio Var Portfolio sd - 9. Compare the Risk-Return of the two stocks ALONE and the joint risk in the portfolio...
Please respond to both pictures asap. I will THUMBS UP within the
hour.
7
8
Eddy's Heating and Cooling has been success in the last four years. Over these years, paid common stock dividends of S4.00 in the first year, 54.20 in the second year, 54.41 in the third year, and its most recent dividend was $4.63. The company wishes to continue this growth indefinitely. What is the value of the company's stock if the required rate of retum is...
15. Which of the following statements is True? When creating a complete portfolio by a risky portfolio and a risk-free asset, a higher allocation to the risky portfolio increases the Sharpe ratio. The lower the risk-free rate, the lower the Sharpe ratios of levered portfolios. With a positive and fixed risk-free rate, doubling the expected return and standard deviation of the risky portfolio will double the Sharpe ratio. Holding constant the risk premium of the risky portfolio, a higher risk-free...
Which of the following statements is FALSE? O A. The required return is the expected return that is necessary to compensate for the risk that an investment will contribute to the portfolio B. We should continue to trade securities until the expected return of each security equals its required retum. OC. security is required return exceeds its expected return, then adding more of it will improve the performance of the portfolio OD. The Sharpe ratio of the portfolio tells us...
2. 3: Risk and Rates of Return: Risk in Portfolio Context Risk
and Rates of Return: Risk in Portfolio Context The capital asset
pricing model (CAPM) explains how risk should be considered when
stocks and other assets are held . The CAPM states that any stock's
required rate of return is the risk-free rate of return plus a risk
premium that reflects only the risk remaining diversification. Most
individuals hold stocks in portfolios. The risk of a stock held in...
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