Question
1. A portfolio is formed with 50% of your money in Stock 1 and 50% of your money in stock 2. Stock 1 has a
1. A portfolio is formed with 50% of your money in Stock 1 and 50% of your money in stock 2. Stock 1 has a standard deviation of 0.03, and stock 2 has a standard deviation of 0.075. Which comes closest to the portfolio variance if the covariance between Stock 1 and Stock 2 is -0.005?
| a. | -0.002 | |
| b. | -0.0002 | |
| c. | -0.011 | |
| d. | -0.00086875 | |
| e. | -0.005 |
2. Microsoft is currently $30 per share. Suppose that the firm announces a 2 for 3 stock split. Based solely on this information, what will the share price of Microsoft to be after the split?
| a. | $20 | |
| b. | $15 | |
| c. | $33 | |
| d. | $30 | |
| e. | $45 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
The New Finance Overreaction Complexity And Their Consequences
Authors: Robert A. Haugen
4th International Edition
0132775875, 9780132775878
