An advantage of investing internationally is: a) The best investments are always overseas. b) Low correlation...
An advantage of investing internationally is:
a) The best investments are always overseas.
b) Low correlation between U.S. stocks and international stock which reduces investment risk.
c) Reduced portfolio volatility and higher returns can be achieved by taking no additional risk.
d) Low correlation reduces portfolio returns.
Homework Answers
Option B is correct
Low correlation between U.S. stocks and international stock which reduces investment risk.
If one invests in international markets, correlation between US stocks and other stocks reduces and hence standard deviation reduces which reduces risk of the portfolio.
Add Answer to:
An advantage of investing internationally is:
a) The best investments are always overseas.
b) Low correlation...
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...
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...
The realized returns for stock A and stock B from 2004-2009 are provided in the table...
The realized returns for stock A and stock B from 2004-2009 are provided in the table below Year 2004 2005 2006 2007 2008 2009 Stock A -9% 21% 6% -4% 3% 10% Stock B 23% 9% 32% -1% -6% 27% (a) Calculate the expected returns (as percents) over the next year for the stocks assuming the average annual realized returns and past volatility from 2004-2009 are unbiased estimators of expected returns and future volatility. stock A 4.5 stock B 14...
The realized returns for stock A and stock B from 2004–2009 are provided in the table...
The realized returns for stock A and stock B from 2004–2009 are provided in the table below Year 2004 2005 2006 2007 2008 2009 Stock A −9% 21% 6% −4% 3% 10% Stock B 19% 5% 28% −5% −10% 23% (a) Calculate the expected returns (as percents) over the next year for the stocks assuming the average annual realized returns and past volatility from 2004–2009 are unbiased estimators of expected returns and future volatility. stock A %stock B % Calculate...
(Computing the standard deviation for a portfolio of two risky investments Mary Gulo recently graded from...
(Computing the standard deviation for a portfolio of two risky investments Mary Gulo recently graded from Nichols State Unversity and is a s to begin investing her meget vigs as a way of ww what she has learned in business School Specifically, she is evaluating an investment in a pontono comprised of two firms common stock. She has collected the flowing information about the common stock of Fm Aandom BBW and standard deviation in portfolio a Mary invests at the...
2. You are the risk manager in a major investment bank. The bank's current portfolio consists...
2. You are the risk manager in a major investment bank. The bank's current portfolio consists of U.S. stocks (50%), bonds (20%), and derivatives (30%). The expected returns and standard deviations of these investments are Expected Return Standard Deviation Stocks Bonds Derivatives 13% 17% 25% 25% 9% 50% A trader comes up with an idea about investing in some new emerging markets: the markets of Polynesia, Micronesia, and New Caledonia. These markets have the follow- ing characteristics: 18% Expected Return...
Correlation, risk, and return Matt Peters wishes to evaluate the risk and return behaviors associated with...
Correlation, risk, and return Matt Peters wishes to evaluate the risk and return behaviors associated with various combinations of assets V and W under three assumed degrees of correlation: perfectly positive, uncorrelated, and perfectly negative. The expected return and risk values calculated for each of the assets are shown in the following table, B a. If the returns of assets V and W are perfectly positively correlated correlation coefficient = +1), describe the range of (1) expected return and (2)...
2. 3: Risk and Rates of Return: Risk in Portfolio Context Risk and Rates of Return:...
2. 3: Risk and Rates of Return: Risk in Portfolio Context Risk
and Rates of Return: Risk in Portfolio Context The capital asset
pricing model (CAPM) explains how risk should be considered when
stocks and other assets are held . The CAPM states that any stock's
required rate of return is the risk-free rate of return plus a risk
premium that reflects only the risk remaining diversification. Most
individuals hold stocks in portfolios. The risk of a stock held in...
نه ت ہے Rank the following four investments in increasing order of historical risk. Art, T-bills,...
نه ت ہے Rank the following four investments in increasing order of historical risk. Art, T-bills, corporate bonds, and common stock T-bills, common stock, corporate bonds, art Corporate bonds, T-bills, common stock, art Common stock, corporate bonds, T-bills, art T-bills, corporate bonds, common stock, art نه نه ف ہے نه An ETF (exchange traded fund): Is priced once a day at the opening of trading Is priced once a day at the close of trading. Is priced continuously during the...
6. Using the data in the table to the right, calculate the return for investing in...
6. Using the data in the table to the right, calculate the return for investing in the stock from January 1 to December 31. Prices are after the dividend has been paid. Date Price Dividend 1/2/03 $32.64 - 2/5/03 $31.49 $0.22 5/14/03 $30.76 $0.18 8/13/03 $32.66 $0.22 11/12/03 $38.52 $0.19 1/2/04 $43.88 - Return for the entire period is __ (Round to two decimal places.) 7. You observe a portfolio for five years and determine that its average return is...
3. Stocks A, B, C and D have the same standard deviation of 10% and the...
3. Stocks A, B, C and D have the same standard deviation of 10% and the same expected return of 5%. The following table shows the correlation coefficient between the returns on these stocks. (note that correlation with itself is always 1). Stock B Stock C Stock D Stock A Stock B Stock C Stock D Stock A 1.0 -0.4 0.9 -0.1 1.0 0.1 1.0 -0.5 -0.2 1.0 (a) Consider a portfolio P = 0 A+ B+ C, calculate the...
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...
The realized returns for stock A and stock B from 2004-2009 are provided in the table below Year 2004 2005 2006 2007 2008 2009 Stock A -9% 21% 6% -4% 3% 10% Stock B 23% 9% 32% -1% -6% 27% (a) Calculate the expected returns (as percents) over the next year for the stocks assuming the average annual realized returns and past volatility from 2004-2009 are unbiased estimators of expected returns and future volatility. stock A 4.5 stock B 14...
(Computing the standard deviation for a portfolio of two risky investments Mary Gulo recently graded from Nichols State Unversity and is a s to begin investing her meget vigs as a way of ww what she has learned in business School Specifically, she is evaluating an investment in a pontono comprised of two firms common stock. She has collected the flowing information about the common stock of Fm Aandom BBW and standard deviation in portfolio a Mary invests at the...
2. You are the risk manager in a major investment bank. The bank's current portfolio consists of U.S. stocks (50%), bonds (20%), and derivatives (30%). The expected returns and standard deviations of these investments are Expected Return Standard Deviation Stocks Bonds Derivatives 13% 17% 25% 25% 9% 50% A trader comes up with an idea about investing in some new emerging markets: the markets of Polynesia, Micronesia, and New Caledonia. These markets have the follow- ing characteristics: 18% Expected Return...
Correlation, risk, and return Matt Peters wishes to evaluate the risk and return behaviors associated with various combinations of assets V and W under three assumed degrees of correlation: perfectly positive, uncorrelated, and perfectly negative. The expected return and risk values calculated for each of the assets are shown in the following table, B a. If the returns of assets V and W are perfectly positively correlated correlation coefficient = +1), describe the range of (1) expected return and (2)...
2. 3: Risk and Rates of Return: Risk in Portfolio Context Risk
and Rates of Return: Risk in Portfolio Context The capital asset
pricing model (CAPM) explains how risk should be considered when
stocks and other assets are held . The CAPM states that any stock's
required rate of return is the risk-free rate of return plus a risk
premium that reflects only the risk remaining diversification. Most
individuals hold stocks in portfolios. The risk of a stock held in...
نه ت ہے Rank the following four investments in increasing order of historical risk. Art, T-bills, corporate bonds, and common stock T-bills, common stock, corporate bonds, art Corporate bonds, T-bills, common stock, art Common stock, corporate bonds, T-bills, art T-bills, corporate bonds, common stock, art نه نه ف ہے نه An ETF (exchange traded fund): Is priced once a day at the opening of trading Is priced once a day at the close of trading. Is priced continuously during the...
3. Stocks A, B, C and D have the same standard deviation of 10% and the same expected return of 5%. The following table shows the correlation coefficient between the returns on these stocks. (note that correlation with itself is always 1). Stock B Stock C Stock D Stock A Stock B Stock C Stock D Stock A 1.0 -0.4 0.9 -0.1 1.0 0.1 1.0 -0.5 -0.2 1.0 (a) Consider a portfolio P = 0 A+ B+ C, calculate the...
Most questions answered within 3 hours.
-
Suppose that XX is a random variable with mean 16 and standard
deviation 5 . Also...
asked 23 minutes ago -
Calculate the number density of argon gas at a temperature of
24C and a pressure of...
asked 3 hours ago -
Alternative
Classification
How to Estimate
Probabilities from Data? ( For continuous Attributes)
And How to generate...
asked 3 hours ago -
An explosion breaks a 20.0-kg object into three parts. The
object is initially moving at a...
asked 4 hours ago -
Calculate the approximate number of residues of Rubisco, which
is involved in carbon fixation in plants,...
asked 5 hours ago -
Other decisions about scientific claims can have a much broader
impact.ENERGYarrow-10x10.png, environment, health, security - all...
asked 6 hours ago -
I need to write a research paper and work cited about this
topic: The United States...
asked 6 hours ago -
Hello! I was wondering if I could have some help?
If the vapor pressure of carvone...
asked 7 hours ago -
An economist wants to estimate the mean per capita income (in
thousands of dollars) for a...
asked 7 hours ago -
What would be the input/output characteristic of a circuit
obtained by putting two of your 2's-complementers...
asked 7 hours ago -
In Drosophila, the transition from the syncytial blastoderm
stage to the cellular blastoderm stage is a...
asked 7 hours ago -
Project management question:
Name 3 different types of resources (hint: humans are one
type)
asked 8 hours ago