Homework Answers
1)
Standard deviation of portfolio = (W12Q12 + W22Q22 + 2 * W1* W2 * CORR * Q1 * Q2)1/2
Standard deviation of portfolio = (0.720.22 + 0.320.52 + 2 * 0.7 * 0.3 * 0.2 * 0.2 * 0.5)1/2
Standard deviation of portfolio = (0.49*0.04 + 0.09*0.25 + 0.0084)1/2
Standard deviation of portfolio = (0.0196 + 0.0225 + 0.0084)1/2
Standard deviation of portfolio = 0.2247 or 22.47%
2)
Stock beta = (Standard deviation of stock / standard deviation of market) * beta
Stock beta = (0.35 / 0.26) * 0.2
Stock beta = 1.346154 * 0.2
Stock beta = 0.27
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You are creating a portfolio of two stocks. The first one has a standard deviation of...
You are creating a portfolio of two stocks. The first one has a standard deviation of 21% and the second one has a standard deviation of 35%. The correlation coefficient between the returns of the two is 0.1. You will invest 40% of the portfolio in the first stock and the rest in the second stock. What will be the standard deviation of this portfolio's returns? Answer in percent, rounded to two decimal places (e.g., 4.32%=4.32).
You are creating a portfolio of two stocks. The first one has a standard deviation of...
You are creating a portfolio of two stocks. The first one has a standard deviation of 29% and the second one has a standard deviation of 39%. The correlation coefficient between the returns of the two is 0.4. You will invest 47% of the portfolio in the first stock and the rest in the second stock. What will be the standard deviation of this portfolio's returns? Answer in percent, rounded to two decimal places (e.g., 4.32%=4.32).
The standard deviation of a stock's annual returns is 35.0%. The standard deviation of market returns...
The standard deviation of a stock's annual returns is 35.0%. The standard deviation of market returns is 26.0%. If the correlation between the returns of the stock and the market is 0.2, what is this stock's beta? Round to two decimal places. Numeric Answer:
Tools Table Window at Help Document3 References Mailings Review View Aa v A AaBbCeDdfe AaBbCcDdfe AaBbCcDc...
Tools Table Window at Help Document3 References Mailings Review View Aa v A AaBbCeDdfe AaBbCcDdfe AaBbCcDc AaBbCcDdE Normal No Spacing Heading 1 Heading 2 You are creating a portfolio of two stocks. The first one has a standard deviation of 18% and the second one has a standard deviation of 40%. The correlation coefficient between the returns of the two is 0.0. You will invest 50% of the portfolio in the first stock and the rest in the second stock....
please answer those two questions 1. 2. A stock you are looking at has generated the...
please answer those two questions
1.
2.
A stock you are looking at has generated the following annual returns: 10.0%, -5.0% and 4.0%. What was the standard deviation of its returns? Answer in percent, rounded to two decimal places (e.g., 4.32% = 4.32). Numeric Answer: A stock has generated an annual average return of 8.0% with a standard deviation of 45.0% during the last 10 years. If the average risk-free rate was 1.6%, what was this stock's Sharpe Ratio? Round...
please answer 6. Calculating a beta coefficient for a single stock Aa Aa Suppose that the...
please answer
6. Calculating a beta coefficient for a single stock Aa Aa Suppose that the standard deviation of returns for a single stock A is σΑ-30%, and the standard deviation of the market return is 얘-10%. If the correlation between stock A and the market is ρΑΜ-0.3, then the stock's beta is Is it reasonable to expect that the volatility of the market portfolio's future expected returns will be greater than the volatility of stock A's returns? O Yes...
please answer 6. Calculating a beta coefficient for a single stock Aa Aa Suppose that the...
please answer
6. Calculating a beta coefficient for a single stock Aa Aa Suppose that the standard deviation of returns for a single stock A is σΑ-30%, and the standard deviation of the market return is 얘-10%. If the correlation between stock A and the market is ρΑΜ-0.3, then the stock's beta is Is it reasonable to expect that the volatility of the market portfolio's future expected returns will be greater than the volatility of stock A's returns? O Yes...
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...
(Computing the standard deviation for a portfolio of two nisky investments, Mary Guilt recently graduated from...
(Computing the standard deviation for a portfolio of two nisky investments, Mary Guilt recently graduated from Nichols State University and is acous to begin investing her mengering a way of applying what she has leamed in business School Specifically, shevang e ment in a portfolio comprised of two ms' common stock. She has collected the following information about the common stock of F A and F H a. If Mary invests all her money in each of the two common...
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2...
Consider the following 6 months of returns for 2 stocks and a
portfolio of those 2 stocks:
The
portfolio is composed of 50% of Stock A and 50% of Stock
B.
a. What is the expected return and standard deviation of returns
for each of the two stocks?
b. What is the expected return and standard deviation of returns
for the portfolio?
c. Is the portfolio more or less risky than the two stocks?
Why?
this is the entire question...
The standard deviation of a stock's annual returns is 35.0%. The standard deviation of market returns is 26.0%. If the correlation between the returns of the stock and the market is 0.2, what is this stock's beta? Round to two decimal places. Numeric Answer:
Tools Table Window at Help Document3 References Mailings Review View Aa v A AaBbCeDdfe AaBbCcDdfe AaBbCcDc AaBbCcDdE Normal No Spacing Heading 1 Heading 2 You are creating a portfolio of two stocks. The first one has a standard deviation of 18% and the second one has a standard deviation of 40%. The correlation coefficient between the returns of the two is 0.0. You will invest 50% of the portfolio in the first stock and the rest in the second stock....
please answer those two questions
1.
2.
A stock you are looking at has generated the following annual returns: 10.0%, -5.0% and 4.0%. What was the standard deviation of its returns? Answer in percent, rounded to two decimal places (e.g., 4.32% = 4.32). Numeric Answer: A stock has generated an annual average return of 8.0% with a standard deviation of 45.0% during the last 10 years. If the average risk-free rate was 1.6%, what was this stock's Sharpe Ratio? Round...
please answer
6. Calculating a beta coefficient for a single stock Aa Aa Suppose that the standard deviation of returns for a single stock A is σΑ-30%, and the standard deviation of the market return is 얘-10%. If the correlation between stock A and the market is ρΑΜ-0.3, then the stock's beta is Is it reasonable to expect that the volatility of the market portfolio's future expected returns will be greater than the volatility of stock A's returns? O Yes...
please answer
6. Calculating a beta coefficient for a single stock Aa Aa Suppose that the standard deviation of returns for a single stock A is σΑ-30%, and the standard deviation of the market return is 얘-10%. If the correlation between stock A and the market is ρΑΜ-0.3, then the stock's beta is Is it reasonable to expect that the volatility of the market portfolio's future expected returns will be greater than the volatility of stock A's returns? O Yes...
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...
(Computing the standard deviation for a portfolio of two nisky investments, Mary Guilt recently graduated from Nichols State University and is acous to begin investing her mengering a way of applying what she has leamed in business School Specifically, shevang e ment in a portfolio comprised of two ms' common stock. She has collected the following information about the common stock of F A and F H a. If Mary invests all her money in each of the two common...
Consider the following 6 months of returns for 2 stocks and a
portfolio of those 2 stocks:
The
portfolio is composed of 50% of Stock A and 50% of Stock
B.
a. What is the expected return and standard deviation of returns
for each of the two stocks?
b. What is the expected return and standard deviation of returns
for the portfolio?
c. Is the portfolio more or less risky than the two stocks?
Why?
this is the entire question...
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