If you invest 60% in stock 1 and 40% in stock 2, what is the variance of the portfolio?
The return on stock 1 has a standard deviation of 32% and the return on stock 2 has a standard deviation of 24%. Their correlation is -0.53.
Homework Answers
Request Answer!
We need at least 10 more requests to produce the answer.
0 / 10 have requested this problem solution
The more requests, the faster the answer.
Add Answer to:
If you invest 60% in stock 1 and 40% in stock 2, what is the variance of the portfolio?
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)
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 invest $18,000 in a stock portfolio with an expected return of 14% and a standard...
You invest $18,000 in a stock portfolio with an expected return of 14% and a standard deviation of 24%. You invest $12,000 in a bond portfolio with an expected return of 6% and a standard deviation of 12%. The correlation between the two funds is 0.45. What is the standard deviation of the resulting portfolio?
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...
Suppose you invest your risky portfolio into one stock and one corporate bond. 50% of your...
Suppose you invest your risky portfolio into one stock and one corporate bond. 50% of your fund is invested in a stock with an expected return of 14% and a standard deviation of 24%. The rest 50% of your fund is invested in a corporate bond with an expected return of 6% and a standard deviation of 12%. The stock and the bond have a correlation of 0.55. What are the expected return and the standard deviation of the resulting...
You put half of your money in a stock portfolio that has an expected return of...
You put half of your money in a stock portfolio that has an expected return of 14% and a standard deviation of 24%. You put the rest of your money in a risky bond portfolio that has an expected return of 6% and a standard deviation of 12%. The stock and bond portfolios have a correlation of .55 and TB or Rf is 2%. What is the SR of the resulting portfolio?
What is the expected return of a portfolio consisting of 60% security 1 and 40% security...
What is the expected return of a portfolio consisting of 60% security 1 and 40% security 2? What is the beta of a portfolio consisting of 60% security 1 and 40% security 2? What is the standard deviation of a portfolio consisting of 60% security 1 and 40% security 2 if the correlation coefficient between securities is zero? What should be the weight of security 1 in a portfolio consisting of security 1 abd 2 to minimize the portfolios standard...
Question 12 1 pts A portfolio is composed of two stocks, A and B Stock A...
Question 12 1 pts A portfolio is composed of two stocks, A and B Stock A has a standard deviation of return of 24%, while stock Bhas 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.0350, the correlation coefficient between the returns on A and Bis 583 438 327 .225 • Previous Next Quiz saved at 10:34am Submit...
1.Stock X has an expected return of 12% and a variance of .04. Stock Y has...
1.Stock X has an expected return of 12% and a variance of .04. Stock Y has an expected return of 24% and a variance of .14. Stocks X and Y have a correlation coefficient of –.4. Calculate the expected return (in %) and standard deviation (in %) of a portfolio consisting of $20,000 invested in stock X and $30,000 invested in stock Y. Unless stated otherwise, compounding is annual and payments occur at the end of the period.
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)
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 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...
What is the expected return of a portfolio consisting of 60% security 1 and 40% security 2? What is the beta of a portfolio consisting of 60% security 1 and 40% security 2? What is the standard deviation of a portfolio consisting of 60% security 1 and 40% security 2 if the correlation coefficient between securities is zero? What should be the weight of security 1 in a portfolio consisting of security 1 abd 2 to minimize the portfolios standard...
Question 12 1 pts A portfolio is composed of two stocks, A and B Stock A has a standard deviation of return of 24%, while stock Bhas 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.0350, the correlation coefficient between the returns on A and Bis 583 438 327 .225 • Previous Next Quiz saved at 10:34am Submit...
Most questions answered within 3 hours.
-
Explain why it is important to know common Windows processes
when conducting a forensic investigation
asked 52 seconds ago -
How do child protective services help to reduce the
vulnerability of minors to human trafficking?
asked 8 minutes ago -
Which of the following is correct?
a. ATC = AVC/Q
b. ATC = AFC/Q
c. ATC...
asked 8 minutes ago -
The height of a Harrier airplane above the ground is given by h
= 4.00t 3...
asked 17 minutes ago -
Subject Conflict resolution :
1-Describe the basic model for engaging someone in a
collaborative discussion in...
asked 17 minutes ago -
Using the four models of CSR, and given your own personal
values, what type of firm...
asked 21 minutes ago -
A 10 kg mass slides along a frictionless plane inclined at 38
degrees to the horizontal....
asked 25 minutes ago -
How many moles of solid sodium fluoride should be added to 1.0 L
of a saturated...
asked 32 minutes ago -
Use R to do the following. please provide the
code
Import the data set `UScereal`, create...
asked 39 minutes ago -
At 100°C, 1.00 mol of liquid water is allowed to expand
isothermally into an evacuated vessel...
asked 59 minutes ago -
A vapor-compression heat pump system uses Refrigerant R-134a as
the working fluid. The refrigerant enters the...
asked 1 hour ago -
A rock band plays at a 67 dB sound level. How many times greater
is the...
asked 1 hour ago