variance of a 50-50 portfolio =Var(R) =0.52*Var(A1)+0.52*Var(A2)
=(0.5)2*(0.25)2+0.52*(0.25)2 =0.031
option A is correct
10. The following lists the expected return and standard deviation of returns for four assets: Η...
Instructor-created question Expected return and standard deviation. Use the following information to answer the questions Return on Asset S in State Return on Probability Return on Asset R in State of Economy Boom Growth Stagnant Recession Asset T in of State State State 0.28 0.39 0.22 0.11 0.040 0.040 0.040 0.040 0.250 0.140 0.180 - 0.030 0.440 0.300 0.010 -0.165 a. What is the expected return of a portfolio with equal investment in all three assets? b. What is the...
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...
Security X has an expected return of 15% and a standard deviation of 35%, and is to be continued in a portfolio with Security Y. The correlation between both assets is 0.75. An investor plans to invest $3000 in Security X and $7000 in Security Y. (a) What will be the expected return om the portfolio? (b) If the investor has a risk tolerance of only 25% or less, will this be achieved? Show with calculations accurate to two decimal...
Portfolio 1- calculate the expected return, variance and standard deviation of asset A 4.8%, Asset B 0.75%, Asset C 17.5 and 20.2 and risk free asset F. Note: there is also a risk free asset F whos expected return is 9.9% I WA TISK and fetui11 man those that are provided in the article. The table below gives information on three risky assets: A, B, and C. Correlations Asset Expected return Standard Deviation of the Return B C 0.4 0.15...
issue on an individual asset - what is the expected return, variance and standard deviation of asset A only I WA TISK and fetui11 man those that are provided in the article. The table below gives information on three risky assets: A, B, and C. Correlations Asset Expected return Standard Deviation of the Return B C 0.4 0.15 11.5 23 0.25 B 14 43 0.25 1 " CI 18 58 0.4 0.15 There is also a risk-free asset F whose...
Expected return and standard deviation. Use the following information to answer the questions: - a. What is the expected return of each asset? b. What is the variance and the standard deviation of each asset? c. What is the expected return of a portfolio with 10% in asset J. 47% in asset K, and 43% in asset L? d. What is the portfolio's variance and standard deviation using the same asset weights from part (c)? Hint: Make sure to round...
You are presented with information on expected returns and standard deviations for 2 assets and a portfolio that was formed with equal proportions of each asset. Asset J Asset K 00800 0.1200 0.0914 Asset L Portfolio Expected return 0.03 0.0767 Variance 0.0842 0.0566 Which of the following statements is true (there are several, select all that are correct): If you want to decrease the risk (standard deviation) of the portfolio, you will increase the proportion to invest in asset J...
b. What are the variance and the standard deviation of each asset? c. What is the expected return of a portfolio with equal investment in all three assets? d. What is the portfolio's variance and standard deviation using the same asset weights in part Please show all steps! Expected return and standard deviation. Use the following information to answer the questions. Return on Asset R in Return on Asset S in State Return on Asset T in State State of...
P8-11 2 Integrative: Expected return, standard deviation, and coefficient of variation Three as- sets-F, G, and H-are currently being considered by Perth Industries. The probability distributions of expected returns for these assets are shown in the following table. 5Y0n Asset F Asset G Asset H i Pr, Return, r Pr, Return, r Pr Return, 1 0.10 40% 0.40 35% 0.10 40% 0.20 0.20 10 0.30 10 20 0,40 0.30 -20 0.40 0 10 0.20 -5 0.20 0 0.10 -10 0.10...
Consider the following data about the expected returns, standard deviations, and correlation between two assets: Asset 1 Asset 2 Expected return 5.3% 6.8% Standard deviation 4.5% 7.8% Correlation coefficient -0.6 Calculate the expected return and standard deviation of a portfolio consisting of a 20% weight in asset 1 and an 80% weight in asset 2. What happens to the expected return and standard deviation of the portfolio when the weight combination changes to 50% in asset 1 and 50% in...