A portfolio is composed of 80% stock and 20% bonds. The variance of stock is 170...
A portfolio is composed of 80% stock and 20% bonds. The variance of stock is 170 and the variance of bonds is 140. The covariance is 30. What is the portfolio's variance?
Select one:
a. 168
b. 101
c. 119
d. 114
Homework Answers
Hil I have got slightly different answer.But I hope it is correct. Please check and let me know for any queries
Add Answer to:
A portfolio is composed of 80% stock and 20% bonds. The variance
of stock is 170...
Your portfolio consists of 20% stock X and 80% stock Y. The standard deviations of the...
Your portfolio consists of 20% stock X and 80% stock Y. The
standard deviations of the returns on X and Y are 10% and 30%
respectively. What is the standard deviation of your portfolio if
correlation coefficient between X and Y is .5? What is the standard
deviation of your portfolio if correlation coefficient between X
and Y is -1?
Your portfolio consists of 20% stock X and 80% stock Y. The standard deviations of the returns on X and...
Assume an investment manager is considering to invest in a portfolio composed of Stock (A) and Stock (B). Stock (A) has an expected return of 10% and a Variance of 100 (Standard Deviation=10), while Stock (B) has an expected return of
Assume an investment manager is considering to invest in a portfolio composed of Stock (A) and Stock (B). Stock (A) has an expected return of 10% and a Variance of 100 (Standard Deviation=10), while Stock (B) has an expected return of 20% and a Variance of 900 (Standard deviation=30).1- Calculate the expected return and variance of the portfolio if the proportion invested in Sock (A) is (0, .2, .3,.5. .6,.7,1) .The Correlation Coefficient is .4.2- If the Correlation Coefficient is...
The variance of a portfolio comprised of many securities is primarily dependent upon the: A) variances...
The variance of a portfolio comprised of many securities is primarily dependent upon the: A) variances of the securities held within the portfolio. B) beta of the portfolio. C) portfolio's correlation with the market. D) covariance between the overall portfolio and the market. E) covariances between the individual securities.
2 Short Questions (30 points) 1. to points) Compute the variance of a portíolio composed of...
2 Short Questions (30 points) 1. to points) Compute the variance of a portíolio composed of assets A, B, and C. The standard deviation are 2%, 6% and 10%, respectively. The weights will be 10% invested on asset A, 20% on B, and 70% on C. All the covariances are zero but the covariance between assets A and C which is 10. 2. (10 points) If the covariance between asset A and the market portfolio is equal to the variance...
A portfolio is composed of two stocks, A and B. Stock A has a standard deviation...
A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 20%, while stock B has a standard deviation of return of 26%. Stock A comprises 60% of the portfolio, while stock B comprises 40% of the portfolio. If the variance of return on the portfolio is .035, the correlation coefficient between the returns on A and B is _________.
15. A portfolio is composed of two stocks, A and B. Stock A has a standard...
15. A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 24%, while stock B has a standard deviation of return of 18%. Stock A comprises 60% of the portfolio, while stock B comprises 40% of the portfolio. If the variance of return on the portfolio is .0380, the correlation coefficient between the returns on A and B is A).583 B).225 C).327 D).128 24. The holding-period return on a stock was...
Problem 1: What is the variance of a portfolio with: w1 =0.2, w2 =0.8, σ12 =10,...
Problem 1: What is the variance of a portfolio with: w1 =0.2, w2
=0.8, σ12 =10, σ22 =20,
and σ12 =5.
Problem 2: a) If the stocks 1 and 2 have negative correlation
12 then their covariance σ12 is
also negative. Yes, no, uncertain. Explain. b) If stocks 1 and 2
are uncorrelated, i.e.
12=0 then their covariance is zero, Yes, no,
uncertain. Explain c) If stocks 1 and 2 have variance
σ2=16 each, could their covariance be equal to...
20. What is the variance of the returns on a portfolio that is invested 60 percent...
20. What is the variance of the returns on a portfolio that is invested 60 percent in stock S and 40 percent in stock T? State of Economy Boom Normal Probability of State of Economy 20% 80% Returns if State Occurs Stock S Stock T 17% 7% 13% 10% A. .000017 B. .000023 C. .000118 D. .000136 E. .000161 si vous ne postany de la 5. What is the profitability index for an investment with the following cash flows given...
HAPPY stock returns have a covariance with the market portfolio of 0.036. The standard deviation of the returns on the market portfolio is 20%, and the expected market risk premium is 7.5%. The company has bonds outstanding total market value of $35 mill
HAPPY stock returns have a covariance with the market portfolio of 0.036. The standard deviation of the returns on the market portfolio is 20%, and the expected market risk premium is 7.5%. The company has bonds outstanding total market value of $35 million. The bond is 10% annual coupon with one-year maturity and sold each at 101.852% of the face value of $1000. The company also has 6 million shares of common stock outstanding, each selling for $20. The corporate...
A portfolio is composed of two stocks, A and B. Stock A has a standard deviation...
A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 35%, while stock B has a standard deviation of return of 15%. The correlation coefficient between the returns on A and B is .45. Stock A comprises 10% of the portfolio, while stock B comprises 90% of the portfolio. The standard deviation of the return on this portfolio is closest to: A. 13.9% B. 7.4% C. 19.2% D. 15.4%
Your portfolio consists of 20% stock X and 80% stock Y. The
standard deviations of the returns on X and Y are 10% and 30%
respectively. What is the standard deviation of your portfolio if
correlation coefficient between X and Y is .5? What is the standard
deviation of your portfolio if correlation coefficient between X
and Y is -1?
Your portfolio consists of 20% stock X and 80% stock Y. The standard deviations of the returns on X and...
2 Short Questions (30 points) 1. to points) Compute the variance of a portíolio composed of assets A, B, and C. The standard deviation are 2%, 6% and 10%, respectively. The weights will be 10% invested on asset A, 20% on B, and 70% on C. All the covariances are zero but the covariance between assets A and C which is 10. 2. (10 points) If the covariance between asset A and the market portfolio is equal to the variance...
15. A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 24%, while stock B has a standard deviation of return of 18%. Stock A comprises 60% of the portfolio, while stock B comprises 40% of the portfolio. If the variance of return on the portfolio is .0380, the correlation coefficient between the returns on A and B is A).583 B).225 C).327 D).128 24. The holding-period return on a stock was...
Problem 1: What is the variance of a portfolio with: w1 =0.2, w2
=0.8, σ12 =10, σ22 =20,
and σ12 =5.
Problem 2: a) If the stocks 1 and 2 have negative correlation
12 then their covariance σ12 is
also negative. Yes, no, uncertain. Explain. b) If stocks 1 and 2
are uncorrelated, i.e.
12=0 then their covariance is zero, Yes, no,
uncertain. Explain c) If stocks 1 and 2 have variance
σ2=16 each, could their covariance be equal to...
20. What is the variance of the returns on a portfolio that is invested 60 percent in stock S and 40 percent in stock T? State of Economy Boom Normal Probability of State of Economy 20% 80% Returns if State Occurs Stock S Stock T 17% 7% 13% 10% A. .000017 B. .000023 C. .000118 D. .000136 E. .000161 si vous ne postany de la 5. What is the profitability index for an investment with the following cash flows given...
Most questions answered within 3 hours.
-
McGlaun Company pays its employees every two weeks. The firm
last paid its employees on September...
asked 11 minutes ago -
You have been gifted a Mogwai as a pet and decide to do a little
online...
asked 15 minutes ago -
given the standard of 200 mg/dl and the absorbance of that
standard is 0.640. What is...
asked 18 minutes ago -
Exercise 8-51 Algo
An accounting professor is notorious for being stingy in giving
out good letter...
asked 26 minutes ago -
month
total distribution cost
level of activity (unit produced)
july
230.000
3500
august
250.000
3750
september...
asked 27 minutes ago -
A smoke detector system uses two devices, A and B. If smoke is
present, the probability...
asked 1 hour ago -
Your division head has assigned another important project to you
and your team. This project is...
asked 40 minutes ago -
Under normal use conditions, the Mean Time To Failure of a
heating coil can be modeled...
asked 1 hour ago -
Consider the probability that fewer than 34 out of 116 CDs will
be defective. Assume the...
asked 55 minutes ago -
4J Manufacturing Company uses a job order cost accounting system
and keeps perpetual inventory records. Prepare...
asked 44 minutes ago -
Please write code in C++
using recursive function
Write a program that computes the sequence of...
asked 43 minutes ago -
What is 345 as an unsigned decimal number? It is 34
with subscript of 5. Not...
asked 59 minutes ago