Suppose Johnson & Johnson and the Walgreen Company have the expected returns and volatilities shown below, with a correlation of
22.1 %
E [R] |
SD [R] |
|
Johnson & Johnson |
6.5 % |
16.7% |
Walgreen Company |
10.3% |
20.3% |
For a portfolio that is equally invested in Johnson & Johnson's and Walgreen's stock, calculate:
a. The expected return.
b. The volatility (standard deviation).
Expected return%= | Wt J&J*Return J&J+Wt WC*Return WC | ||||
Expected return%= | 0.5*0.065+0.5*0.103 | ||||
a. Expected return%= | 8.4 | ||||
Variance | =( w2A*σ2(RA) + w2B*σ2(RB) + 2*(wA)*(wB)*Cor(RA, RB)*σ(RA)*σ(RB)) | ||||
Variance | =0.5^2*0.167^2+0.5^2*0.203^2+2*0.5*0.5*0.167*0.203*0.221 | ||||
Variance | 0.02102 | ||||
Standard deviation= | (variance)^0.5 | ||||
b. Standard deviation= | 14.5% |
Suppose Johnson & Johnson and the Walgreen Company have the expected returns and volatilities shown below,...
Suppose Johnson & Johnson and the Walgreen Company have the expected returns and volatilities shown below, with a correlation of 22.9%. Johnson & Johnson Walgreen Company E[R] 7.6% 9.7% SD [R] 15.2% 19.6% For a portfolio that is equally invested in Johnson & Johnson's and Walgreen's stock, calculate: a. The expected return. b. The volatility (standard deviation). a. The expected return. The expected return of the portfolio is %. (Round to one decimal place.) b. The volatility (standard deviation). The...
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Suppose Johnson & Johnson and the Walgreen Company have the expected returns and volatilities shown below, with a correlation of 21.5%. E [R] SD [R] Johnson & Johnson 6.3% 15.5% Walgreen Company 9.5% 19.8% For a portfolio that is equally invested in Johnson & Johnson's and Walgreen's stock, calculate: a. The expected return. b. The volatility (standard deviation). a. The expected return. The expected return of the portfolio is? (Round to one decimal place.) Please show steps taken to reach...
Suppose Johnson & Johnson and the Walgreen Company have the expected returns and volatilities shown below, with a correlation of 21%. E[R] SD[R] Johnson & Johnson 5% 14% Walgreen Company 10% 20% Consider a portfolio that is equally invested in Johnson & Johnson's and Walgreen's stock (a) Calculate the expected return as a percent. % (b) Calculate the volatility (standard deviation) of returns as a percent. (Round your answer to two decimal places.) %
:Question Help Suppose Johnson & Johnson and the Walgreen Company have the expected returns and volatilities shown below, with a correlation of 21.9%. Johnson & Johnson Walgreen Company E[R] 7.7% 9.3% SD [R] 16.1% 19.2% For a portfolio that is equally invested in Johnson & Johnson's and Walgreen's stock, calculate: a. The expected return. b. The volatility (standard deviation). a. The expected return. The expected return of the portfolio is %. (Round to one decimal place.) b. The volatility (standard...
Please calculate the expected return and the
volatility (standard deviation)
11 of 17 (5 complete) HW Score: 29%, 29 of 100 pls bol Score: 0 of 3 pts of P 12-15 (similar to) Assigned Media || : Question Help Suppose Johnson & Johnson and the Walgreen Company have the expected returns and volatilities shown below, with a correlation of 21.1%. sir E[R] 6.6% Johnson & Johnson Walgreen Company SD [R] 15.4% 20.3% 10 6% 3 For a portfolio that is...
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