Diversification Inv. Two 1. Assets A and B have returns as follows: probability .4 Rp 16%...
2. Portfolio Choice Suppose we have assets A and B with the following distribution of returns: Probability Return for A .01 Return for B -.14 .00 .03 TO .05 .07 14 .30 .09 .50 a. Compute the expected returns for assets A and B, rA and rg. b. Compute the variances of A and B, oả and oß. c. Compute the covariance of A and B, CAR- d. Use the formulas for portfolio returns and risk to write the expected...
Suppose there are three assets: A, B, and C. Asset A’s expected return and
standard deviation are 1 percent and 1 percent. Asset B has the same expected
return and standard deviation as Asset A. However, the correlation coefficient of
Assets A and B is −0.25. Asset C’s return is independent of the other two assets.
The expected return and standard deviation of Asset C are 0.5 percent and 1
percent.
(a) Find a portfolio of the three assets that...
1.3 (5 points) Two stocks have the following expected returns and standard deviations Stock Stock Expected return Standard Deviation A 10% 12% B 15% 20% Consider a portfolio of A and B, and let w, and wg denote the portfolio weights of these two assets, with W + W, =1. Suppose that the correlation between the expected returns on A and B is equal to 0.3. Use these data to construct the portfolio of A and B with the lowest...
1. The universe of available securities includes two risky stock funds, A and B, and T-blls. The data for the universe are as follows Expected Return Standard Deviation A 10% 20% В 30 60 T-bills The correlation coefficient between funds A and B is -0.2. a. Find the optimal risky portfolio, P, and its expected return and standard deviation. b. Find the slope of the CAL supported by T-bills and portfolio P c. How much will an investor with A...
1. The universe of available securities includes two risky stock funds, A and B and T-bills. The data for the universe are as follows: Expected Return Standard Deviation 109 20 Tbilis The correlation coefficient between funds A and B is -0.2. a. Find the optimal risky portfolio, P. and its expected return and standard deviation b. Find the slope of the CAL supported by T-bills and portfolio P. c. How much will an investor with 4-5 invest in funds A...
The
first 4 are answered, but I need help on the other 16.
Respectfully, please don't answer if you can't help with all 20.
QUESTION 1 101-010) Questions 1-10 are designed to review some statistical concepts as well as to help you understand the benefits from diversification. Assume that there are two assets (A and B) and there are four possible future scenarios. The four scenarios and their probabilities are shown in the following table. The last two columns show...
1 What is the weight of capital for ABC Limited which has the following capital structure? Review Later $5m of equity with a cost of equity of 1 596; $2m of mezzanine finance with a cost of 9.5%; $1 m of senior debt with a cost of debt of 796 13.73% 8.63% 9.56% 12.63% 12 What is the expected share return given the following macro-economic probabilities? Probability of recession 20%-Share return 596; Probability of steady state 60% . Share return...
B. MICFUELUNUML U C. idiosyncratic risk CD. systematic risk 0.5. Which of thes A. II,IV B. II,IV.v C. 1,111,1V ck A and Z have a correlation 05 D. 1,111, E. I, 3 Stock A and Stock B have a correlation Correlation-0.7, Stock A and Z have than a portfolio of story are an in is part of market A. Stock A and Z have a stronge CB. A portfolio of stock A and B P C C. Stock A and...
Nombre . Responde las siguientes preguntas A) SI P(A 6 B)-1/3 P(B)- 1/4 y P(Ay B)-1/5, halle P(A) B ) Cual es la probabilidad de lanzar un par de dados y que la suma de los resultados de los dos dados sea 7 C ) Una prueba de selección múltiple tiene cinco posibles respuestas de las cuales una es correcta, si 13 estudiantes eligen las respuestas al azar. Cuaál es la probabilidad de que los 13 escojan la respuesta correcta?...