Question

John is planning on investing in Marvel and DC Comics, initially at a 60%/40% split respectively. The expected return on Marv
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Standard Deviation = [(0.60)2(0.05)2 + (0.40)2(0.02)2 + 2(0.60)(0.40)(0.05)(0.02)(0.50)]1/2

Standard Deviation = 0.0352

Add a comment
Know the answer?
Add Answer to:
John is planning on investing in Marvel and DC Comics, initially at a 60%/40% split respectively....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • a. You have constructed a portfolio consisting of 40 percent Stock A and 60 percent Stock...

    a. You have constructed a portfolio consisting of 40 percent Stock A and 60 percent Stock B. Stock A has expected return of 15 percent and standard deviation of 20 percent. Stock B has expected return of 7 percent and standard deviation of 10 percent. The correlation between the returns of these stocks is 0.5. Compute the expected return and standard deviation of your portfolio returns. (10 pts)

  • You are considering investing in two securities, X and Y. The following data are available for...

    You are considering investing in two securities, X and Y. The following data are available for the two securities: Security X Security Y Expected return 0.03 0.05 Standard deviation of returns 0.02 0.07 Beta 1.40 0.70 Round your answers to two decimal places. If you invest 40 percent of your funds in Security X and 60 percent in Security Y and if the correlation of returns between X and Y is +0.5, compute the following: The expected return from the...

  • Assume you are considering investing your personal portfolio in only two possible risky assets: 60% invested...

    Assume you are considering investing your personal portfolio in only two possible risky assets: 60% invested in Asset Y and the rest in Asset Z. The characteristics of these two risky assets are as follows: Asset Y has an Expected Return of 12% and a standard deviation of 15% Asset Z has an Expected Return of 9% and a standard deviation of 12% Correlation between the returns of Asset Y and Asset Z is 0.20 Find the Expected Return of...

  • a. You have constructed a portfolio consisting of 40 percent Stock A and 60 percent Stock...

    a. You have constructed a portfolio consisting of 40 percent Stock A and 60 percent Stock B. Stock A has expected return of 15 percent and standard deviation of 20 percent. Stock B has expected return of 7 percent and standard deviation of 10 percent. The correlation between the returns of these stocks is 0.5. Compute the expected return and standard deviation of your portfolio returns. (10 pts) b. Using a diagram to illustrate your points, explain the two key...

  • a. You have constructed a portfolio consisting of 40 percent Stock A and 60 percent Stock...

    a. You have constructed a portfolio consisting of 40 percent Stock A and 60 percent Stock B. Stock A has expected return of 15 percent and standard deviation of 20 percent. Stock B has expected return of 7 percent and standard deviation of 10 percent. The correlation between the returns of these stocks is 0.5. Compute the expected return and standard deviation of your portfolio returns. (10 pts) D. Using a diagram to illustrate your points, explain the two key...

  • You are considering investing in two securities, X and Y. The following data are available for...

    You are considering investing in two securities, X and Y. The following data are available for the two securities: Security X Security Y Expected return 0.09 0.02 Standard deviation of returns 0.04 0.06 Beta 1.00 0.85 Round your answers to two decimal places. If you invest 40 percent of your funds in Security X and 60 percent in Security Y and if the correlation of returns between X and Y is +0.45, compute the following: The expected return from the...

  • Consider a 2 asset portfolio with 60% in Google Inc. (GOOG) and 40% in John Deere (DE). Google has a standard deviation...

    Consider a 2 asset portfolio with 60% in Google Inc. (GOOG) and 40% in John Deere (DE). Google has a standard deviation of 60%, John Deere has a standard deviation of 45% and their correlation is 0.2. What is the standard deviation of returns of the portfolio? You bought 200 shares of Microsoft at $50 per share, 100 shares of IBM for $100 a share and 300 shares of Amazon.com for $25 per share. What is the portfolio weight on...

  • a. Using a 40/60 split, what is the weighted average standard deviation of the two stocks?...

    a. Using a 40/60 split, what is the weighted average standard deviation of the two stocks? b. Recalculate the standard deviation of a portfolio of the two stocks c. What is the reduction in standard deviation that results from the creation of a portfolio of the two stocks? WeVest Financial Advisors suggests an investment in two stocks (40% in Stock A and 60% in Stock B). They claim the investment will reduce risk through diversification, but they need proof. This...

  • 11. suppose the expected returns and standard deviations of Stock A and B are E(R) -...

    11. suppose the expected returns and standard deviations of Stock A and B are E(R) - 0.10, E(R) -0.14, -0.36, 0 = 0.61 Calculate the expected return and standard deviation of a portfolio that is composed of 40 percent A and 60 percent B when correlation between the returns on A and B is 0.5 b. Calculate the standard deviation of a portfolio that is composed of 40 percent A and 60 percent B when the correlation coefficient between the...

  • Ebenezer Scrooge has invested 40% of his money in share A and the remainder in share...

    Ebenezer Scrooge has invested 40% of his money in share A and the remainder in share B. He assesses their prospects as follows: A 18 Expected return (%) Standard deviation (3) Correlation between returns 21 0.5 a. What are the expected return and standard deviation of returns on his portfolio? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) 19.80 % Expected return Standard deviation b. How would your answer change if the...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT