Question
1)What are the portfolio weights for a portfolio that has 135 shares of Stock A that sell for $84 per share and 110 shares of
1)What are the portfolio weights for a portfolio that has 135 shares of Stock A that sell for $84 per share and 110 shares of Stock B that sell for $82 per share?(Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)
2)Consider the following information:
Probability of State | Rate of Return if State Occurs | ||||||||||
Economy | of Economy | Stock A | Stock B | ||||||||
Recession | .21 | .040 | .31 | ||||||||
Normal | .61 | .120 | .21 | ||||||||
Boom | .18 | .200 | .44 |
Calculate the standard deviation for the two stocks.(Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimalplaces, e.g., 32.16.)
Standard deviation | |
A | % |
B | % |
3)Asset W has an expected return of 13.15 percent and a beta of 1.28. If the risk-free rate is 4.53 percent, complete the following table for portfolios of Asset W and a risk-free asset.(Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Enter your portfolio expected return answers as a percent rounded to 2 decimal places, e.g., 32.16. Enter your portfolio beta answers rounded to 3 decimal places, e.g., 32.161.)
Percentage of | Portfolio | Portfolio | ||||
Portfolio in Asset W | Expected Return | Beta | ||||
0 | % | % | ||||
25 | % | |||||
50 | % | |||||
75 | % | |||||
100 | % | |||||
125 | % | |||||
150 | % | |||||
|
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