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![Let w be the weight of Stock-A and 1-w be the weight of Stock-B in the portfolio in order to earn portfolio return of 12%, (w x Stock-As return) (1-w) xStock-As return] (w/X 10%) + [(1-w) x 15%)-12% 0.10w + 0.15-0.15w = 0.12 0.05w 0.12-0.15 -0.05w-0.03 wー-0.03/-0.05 w 0.60 >1-w 0.40 [1-0.60] Portfolio return Therefore, Stock-As weight in the portfolio Stock-Bs weight in the portfolio 0.60 0.40 Portfolios Standard deviation (Stock-As weight x Stock-As S.D.)+ (Stock-Bs weight x Stock-Bs S.D.) portfolios standard deviation = (0.60 x 20%) + (0.40 x 40%) portfolios standard deviation = 12% + 16% Portfolios Standard deviation- 28%](http://img.homeworklib.com/questions/836bc5c0-7216-11ea-af37-0d2be4b5dabe.png?x-oss-process=image/resize,w_560)
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You can form a portfolio of two assets, A and B, whose retuns have the following...
You can form a portfolio of two assets, A and B, whose retums have the following...
You can form a portfolio of two assets, A and B, whose retums have the following characteristics Expected Retum 9% Standard 29% 45 .3 17 a. lf you demand an expected return of 15%, what are the portfolio wei hts? Do not round intermediate calculations. Round your answers to 3 decimal places.) Stock" "Portfolio Weight- b. What is the portfolio's standard deviation? (Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answer as a percent...
You can form a portfollio of two assets, A and B, whose retums have the following...
You can form a portfollio of two assets, A and B, whose retums have the following characteristics Expected Retum 9% Standard Deviation 29% 17 45 a. lf you demand an expected return of 15%, what are the portfolio weights? Do not round intermediate calculations. Round your answers to 3 decimal places) Stock Portfolio Weight b. What is the portfolio's standard deviation? (Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answer as a percent rounded...
I understand that the weights are .6 and .4, not sure how to get that from...
I understand that the weights are .6 and .4, not sure how to get
that from .12=(Wa)(.1)+(1-Wa)(.15)
20. Portfolio risk You can form a portfolio of two assets, A and B, whose returns have the following characteristics: Stock Expected Return Standard Deviation Correlation A 10% 20% 0.5 If you demand an expected return of 12%, what are the portfolio weights? What is the portfolio's standard deviation?
P 12-18 (similar to) Question Help You have a portfolio with a standard deviation of 26%...
P 12-18 (similar to) Question Help You have a portfolio with a standard deviation of 26% and an expected return of 15% You are considering adding one of the two stocks in the following table. If after adding the stock you will have 20 % of your money in the new stock and 80 % of your money in your existing portfolio, which one should you add? Еxpected Standard Correlation with Your Portfolio's Retuns Return Deviation Stock A Stock B...
1. Consider a portfolio P comprised of two risky assets (A and B) whose returns have...
1. Consider a portfolio P comprised of two risky assets (A and B) whose returns have a correlation of zero. Risky asset A has an expected return of 10% and standard deviation of 15%. Risky asset B has an expected return of 7% and standard deviation of 11%. Assuming a risk-free rate of 2.5%, what is the standard deviation of returns on the optimal risky portfolio? a) 9.18% b) .918% c) .84% d) 8.42%
There are three assets, A, B and C, where A is the market portfolio and C...
There are three assets, A, B and C, where A is the market portfolio and C is the risk-free asset. The return on the market has a mean of 12% and a standard deviation of 20%. The risk-free asset yields a return of 4%. Asset B is a risky asset whose return has a standard deviation of 40% and a market beta of 1. Assume that the CAPM holds. Compute the expected return of asset B and its covariances with...
You have been asked for your advice in selecting a portfolio of assets and have been...
You have been asked for your advice in selecting a portfolio of assets and have been supplied with the following data: Projected Return Year Asset A Asset B Asset C 2018 10% 15% 11% 2019 12% 13% 13% 2020 14% 11% 15% You have been told that you can create two portfolios-- one consisting of assets A and B and the other consisting of assets A and C-- by investing equal proportions (50 %) in each of the two component...
You have a portfolio with a standard deviation of 30 % and .an expected return of...
You have a portfolio with a standard deviation of 30 % and .an expected return of 15 %. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 30 % of your money in the new stock and 70 % of your money in your existing portfolio, which one should you add? Expected Return: (ER) Standard Deviation:(STNDDEV) Correlation with Your Portfolio's Returns(Corr) Stock A (ER) 15% (STNDDEV)25% (Corr)0.3 Stock...
You have been asked for your advice in selecting a portfolio of assets and have been...
You have been asked for your advice in selecting a portfolio of assets and have been supplied with the following data: Projected Return Year Asset A Asset B Asset C 2018 14% 14% 10% 2019 16% 12% 12% 2020 18% 10% 14% You have been told that you can create two portfolios-- one consisting of assets A and B and the other consisting of assets A and C-- by investing equal proportions (50 %) in each of the two component...
You have been asked for your advice in selecting a portfolio of assets and have been...
You have been asked for your advice in selecting a portfolio of assets and have been supplied with the following data: Projected Return Year Asset A Asset B Asset C 2021 13% 17% 13% 2022 15% 15% 15% 2023 17% 13% 17% You have been told that you can create two portfolio------ one consisting of assets A and B and the other consisting of assets A and C ---------- by investing equal proportions (50 %)...
You can form a portfolio of two assets, A and B, whose retums have the following characteristics Expected Retum 9% Standard 29% 45 .3 17 a. lf you demand an expected return of 15%, what are the portfolio wei hts? Do not round intermediate calculations. Round your answers to 3 decimal places.) Stock" "Portfolio Weight- b. What is the portfolio's standard deviation? (Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answer as a percent...
You can form a portfollio of two assets, A and B, whose retums have the following characteristics Expected Retum 9% Standard Deviation 29% 17 45 a. lf you demand an expected return of 15%, what are the portfolio weights? Do not round intermediate calculations. Round your answers to 3 decimal places) Stock Portfolio Weight b. What is the portfolio's standard deviation? (Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answer as a percent rounded...
I understand that the weights are .6 and .4, not sure how to get
that from .12=(Wa)(.1)+(1-Wa)(.15)
20. Portfolio risk You can form a portfolio of two assets, A and B, whose returns have the following characteristics: Stock Expected Return Standard Deviation Correlation A 10% 20% 0.5 If you demand an expected return of 12%, what are the portfolio weights? What is the portfolio's standard deviation?
P 12-18 (similar to) Question Help You have a portfolio with a standard deviation of 26% and an expected return of 15% You are considering adding one of the two stocks in the following table. If after adding the stock you will have 20 % of your money in the new stock and 80 % of your money in your existing portfolio, which one should you add? Еxpected Standard Correlation with Your Portfolio's Retuns Return Deviation Stock A Stock B...
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