19. The covariance between the rates of return of two stocks is 0.16. The standard deviations of...
19. The covariance between the rates of return of two stocks is 0.16. The standard deviations of the rates of return are 0.5 and 0.4. What is the correlation coefficient?
- 0.28
- 0.32
- -0.68
- 0.80
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19. The covariance between the rates of return of two stocks is
0.16. The standard deviations of...
Suppose the expected returns and standards deviations of two stocks were stock A: E (R) =9%,...
Suppose the expected returns and standards deviations of two stocks were stock A: E (R) =9%, STANDARD DEVIATION = 36% STOCK B: E (R) = 15%, STANDARD DEVIATION = 62% A. calculate the expected return of a portfolio that is composed of 35% of stock A and 65% of stock B. b. calculate the standard deviation of this portfolio when the correlation coefficient between the returns is 0.5 c. calculate the standard deviation of this portfolio (same weights in each...
Consider an investor who owns two stocks. Google Inc. (GOOGL) has an expected return of 8...
Consider an investor who owns two stocks. Google Inc. (GOOGL) has an expected return of 8 percent, and the investor owns $15,000 worth of the stock and he also owns $10,000 of Amazon Inc. (AMZN), which has an expected return of 6 percent. What is the expected return of his portfolio? The correlation between the two stocks is ? = ‒ 0.4. What is the standard deviation of the portfolio if the standard deviations of the two stocks are ??????...
Use the Data for Two Stocks to determine the following: Create a one-way data table that...
Use the Data for Two Stocks to determine the following: Create a one-way data table that determines the different means and standard deviations for portfolios consisting of combinations of Stock A and Stock B by varying the correlation coefficient value between Stock A and Stock B through the full range of possible correlation coefficient values. Use increments of 0.1 for the possible correlation coefficient values. Graph the means and the standard deviations of the portfolios from the one-way data table....
PROBLEM 4. Covariance and Correlation Based on the following information, calculate the expected return and standard...
PROBLEM 4. Covariance and Correlation Based on the following information, calculate the expected return and standard deviation of each of the following stocks. Assume each state of the economy is equally likely to happen. What are the covariance and correlation between the returns of the two stocks? State of Economy Return on Stock A Return on Stock B Bear . 108 -.067 Normal .126 .113 Bull .064 .276
3. Suppose that the correlation coefficient between the rates of return on Knowlode Mutual Fund and...
3. Suppose that the correlation coefficient between the rates of return on Knowlode Mutual Fund and the market portfolio is 0.5. The standard deviations of the rates of return are 0.20 for Knowlode and 0.15 for the market portfolio. Find beta of Knowlode Mutual Fund
The covariance between the returns of stock A and stock B is –125. The standard deviation...
The covariance between the returns of stock A and stock B is –125. The standard deviation of the rates of return is 20 for stock A and 10 for stock B. The correlation coefficient of the rates of return between A and B is closest to ______. a. 0.625 b. -0.375 c. 0.375 d.-0.625
6. Suppose the index model for stocks 1 and 2 has the following results The standard...
6. Suppose the index model for stocks 1 and 2 has the following results The standard deviations of e1 and e2 are 20% and 25% respectively. (1) Calculate the standard deviation of stock 1 and stock 2. (2) What is the covariance between each stock and the market index (3) What are the covariance and correlation coefficient between these two stocks? (4) Break down the variance of each stock into its systematic and firm-specific component.
Stocks A & B have the expected returns and standard deviations shown in the table below:...
Stocks A & B have the expected returns and standard deviations shown in the table below: Stock E(R) 12% 30% 19% 50% The correlation between A and B is 0.4. The risk-free rate is 3% and you have a risk-aversion parameter of 2. What is the proportion of your investment in A and B, respectively, in your optimal risky portfolio?
s presented with the two following stocks 17. The investor Stock A Stock B Expected Return...
s presented with the two following stocks 17. The investor Stock A Stock B Expected Return Standard Deviation 30% 40% 60% 50% the portfolio that the expected return Assume that the correlation coefficient between the stocks is zero. What stock A invests 30% i A.20% B.37% 07a 18. The investor is presented with the two following stocks: Stock A Stock B Expected Return Standard Deviation 0% 40% 50% 60% Assume that the correlation coefficient between the stocks is zero. What...
Suppose the expected returns and standard deviations of Stocks A and B are E(RA) = .088,...
Suppose the expected returns and standard
deviations of Stocks A and B are E(RA) = .088, E(RB) = .148, σA =
.358, and σB = .618.
Suppose the expected returns and standard deviations of Stocks A and B are E(RA) = .088, E(RB) = .148, 0A = .358, and 0B = .618. a-1. Calculate the expected return of a portfolio that is composed of 33 percent A and 67 percent B when the correlation between the returns on A and...
PROBLEM 4. Covariance and Correlation Based on the following information, calculate the expected return and standard deviation of each of the following stocks. Assume each state of the economy is equally likely to happen. What are the covariance and correlation between the returns of the two stocks? State of Economy Return on Stock A Return on Stock B Bear . 108 -.067 Normal .126 .113 Bull .064 .276
3. Suppose that the correlation coefficient between the rates of return on Knowlode Mutual Fund and the market portfolio is 0.5. The standard deviations of the rates of return are 0.20 for Knowlode and 0.15 for the market portfolio. Find beta of Knowlode Mutual Fund
6. Suppose the index model for stocks 1 and 2 has the following results The standard deviations of e1 and e2 are 20% and 25% respectively. (1) Calculate the standard deviation of stock 1 and stock 2. (2) What is the covariance between each stock and the market index (3) What are the covariance and correlation coefficient between these two stocks? (4) Break down the variance of each stock into its systematic and firm-specific component.
Stocks A & B have the expected returns and standard deviations shown in the table below: Stock E(R) 12% 30% 19% 50% The correlation between A and B is 0.4. The risk-free rate is 3% and you have a risk-aversion parameter of 2. What is the proportion of your investment in A and B, respectively, in your optimal risky portfolio?
s presented with the two following stocks 17. The investor Stock A Stock B Expected Return Standard Deviation 30% 40% 60% 50% the portfolio that the expected return Assume that the correlation coefficient between the stocks is zero. What stock A invests 30% i A.20% B.37% 07a 18. The investor is presented with the two following stocks: Stock A Stock B Expected Return Standard Deviation 0% 40% 50% 60% Assume that the correlation coefficient between the stocks is zero. What...
Suppose the expected returns and standard
deviations of Stocks A and B are E(RA) = .088, E(RB) = .148, σA =
.358, and σB = .618.
Suppose the expected returns and standard deviations of Stocks A and B are E(RA) = .088, E(RB) = .148, 0A = .358, and 0B = .618. a-1. Calculate the expected return of a portfolio that is composed of 33 percent A and 67 percent B when the correlation between the returns on A and...
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