Consider a two-stock portfolio of stocks C and D. Stock C has a volatility of 20% and stock D has a volatility of 60%. What can be the maximum possible volatility of the portfolio with portfolio weights XC = 0.8 and XD = 0.2?
Consider a two-stock portfolio of stocks C and D. Stock C has a volatility of 20%...
Consider a portfolio that contains two stocks. Stock "A" has an expected return of 10% and a standard deviation of 20%. Stock "B" has an expected return of -10% and a standard deviation of 25%. The proportion of your wealth invested in stock "A" is 60%. The correlation between the two stocks is 0. What is the expected return of the portfolio? Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your response...
please work all parts. 2. Stock A has expected return of 14% and volatility 30%. Stock B has expected return of 8% and volatility 19%. The correlation between two stocks is -0.2. The risk free interest rate is 4% (a) Find the expected returns, volatilities, and Sharpe ratios of portfolios that maintain 100.0% investment in Stock A and 100(1-x)% in Stock B, where x is given in the following table. Volatility Expected return Sharpe ratio 0.8 0.9 1.0 (b) How...
Suppose Ford Motor stock has an cxpcctcd return of 20% and a volatility of 40%, and Molson Coors Brewing has an expected return of 10% and a volatility of 30%. If thc two stocks are a. What is the expected return and volatility of an equally weighted portfolio of the two b. Given your answer to part a, is investing all of your moncy in Molson Coors stock an c. Is investing all of your moncy in Ford Motor an...
98) Which of the following statements is FALSE A) The volatility declines as the number of stocks in a portfolio grows. B) An equally weighted portfolio is a porfolio in which the same amount is invested in eadh stock C) As the number of stocks in a portfolio grows large, the variance of the portfolio is determined primarily by the average covariance among the stocks D) When combining stocks into a portfolio that puts positive weight on each stock, unless...
5.2 Risk premium Consider a portfolio consisting of the following three stocks: The volatility of the market portfolio is Correlation with the Market Portfolio 0.35 0.52 0.54 Volatility 13% 28% 11% Portfolio weight 0.26 0.29 0.45 EC Cor Green Midget Alive And Well 10% and it has an expected return of 8%. The risk-free rate is 3% 1. Compute the beta and 2. Using your answer from question (1), calculate the expected return of the portfolio 3. What is the...
-9 points UTPBFIN1 III.E.016. Consider a portfolio consisting of the following three stocks. Portfolio Weight Volatility Correlation with the market portfolio HEC Corp 0.45 12 0.7 Green Midget yer 02 25% 0.5 AliveAnd well 0.35 134 0.6 The volatility of market portfolio is 10% and it has an expected return of 3%. The risk-free rate is 39 (a) Compute the beta of each stock (rounded to 4 decimal places) HEC Corp Green Midget AliveAnd Well (b) Compute the expected return...
15. A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 24%, while stock B has 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 .0380, the correlation coefficient between the returns on A and B is A).583 B).225 C).327 D).128 24. The holding-period return on a stock was...
Suppose Ford Motor stock has an expected return of 16% and a volatility of 40%, and Molson Coors Brewing has an expected return of 14% and a volatility of 30%. If the two stocks are uncorrelated, a. What is the expected return and volatility of a portfolio consisting of 72% Ford Motor stock and 28% of Molson Coors Brewing stock? b. Given your answer to (a), is investing all of your money in Molson Coors stock an efficient portfolio of...
A portfolio is comprised of two stocks, A and B. Stock A has a standard deviation of return of 25% while stock B has a standard deviation of return of 5%. Stock A comprises 20% of the portfolio while stock B comprises 80% of the portfolio. If the variance of return on the portfolio is .0080, the correlation coefficient between the returns on A and B is __________. A. -.975 B. -.025 C. .025 D. .975
The risk-free rate is 0%. The market portfolio has an expected return of 20% and a volatility of 20%. You have $100 to invest. You decide to build a portfolio P which invests in both the risk-free investment and the market portfolio.a. How much should you invest in the market portfolio and the risk-free investment if you want portfolio P to have an expected return of 40%?b. How much should you invest in the market portfolio and the risk-free investment...