Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on May 18, 2024

An investor is considering investing in the following two stocks, X and Y, the portfolio weights are 30% and 70% respectively. Expected return Variance X9%

An investor is considering investing in the following two stocks, X and Y, the portfolio weights are 30% and 70% respectively.

Expected return Variance X9% 15% Y4% 7%

The correlation between the two securities returns is -0.4.

Calculate the expected return and standard deviation of the portfolio. In your opinion, is this a well-diversified portfolio? Why?

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

Recommended Textbook for

Principles of managerial finance

Authors: Lawrence J Gitman, Chad J Zutter

12th edition

9780321524133, 132479540, 321524136, 978-0132479547

More Books

Students also viewed these Finance questions

Question

. G ezto.mheducation.com + in M Inbox (8) - dhi.. Q CMIT Exam (2... i Construction. X Nonresident Ali... in (4) Notification.. Content M Question 11 -... Course Hero Start Page Quiz #2 i Saved Help...

Answered: 1 week ago

Question

12. Suppose you formed a 1-stock portfolio, then added one randomly-picked stock at a time to the portfolio, continuing until the portfolio contained every publicly traded stock. Draw a ?reasonable?...

Answered: 1 week ago

Question

★★★★★

Question-1 Consider a company whose stock is expected to follow the following pattern under the different economic situations: Return (%) Probabilities -20 0.05 -10 0.10 10 0.20 15 0.25 20 0.20 25...

Answered: 1 week ago

Question

★★★★★

You invested $1000 in Sinoland Bank stock when Sinoland/US Dollar exchange rate was 10:1, and you received exactly 200 local shares of the stock. The stock price rises 23% in local currency terms,...

Answered: 1 week ago

Question

★★★★★

The North American Industry Classification System (NAICS) codes classify businesses by production processes, providing a common classification system for North America and better compatibility with...

Answered: 1 week ago

Question

★★★★★

https://www.ted.com/talks/tom_wujec_build_a_tower_build_a_team https://hr.mit.edu/learning-topics/teams/articles/stages-development https://www.youtube.com/watch?v=nRYRZg8YSso...

Answered: 1 week ago

Question

★★★★★

=+b) In which graph is a larger value of a used?

Answered: 1 week ago

Question

★★★★★

Record the following transactions in general journal form using the periodic inventory system: June 5 Sold merchandise on account to Wilson, Inc., $ 520; terms 1/10, n/30. 12 Bought merchandise on...

Answered: 1 week ago

Question

★★★★★

Use T-accounts to show how balance sheets (assets and liabilities) of the Federal Reserve, the banks, and the public change after each of the following events. You should assume the required reserves...

Answered: 1 week ago

Question

★★★★★

Ellipses Corp is a small business that operates in Herndon, VA. The company is located at10 Period Lane, Herndon, VA 20170. Its federal Employer Identification Number is 77-7777777, and its...

Answered: 1 week ago

Question

★★★★★

Find the value of the following 17 tan cos 5 15 Give your answer in lowest terms Rationalize the denominator if necessary Enter the number that belongs in the green box Enter

Answered: 1 week ago

Question

★★★★★

A state fisheries commission wants to estimate the number of bass caught in a given lake during a season in order to restock the lake with the appropriate number of young fish. The commission could...

Answered: 1 week ago

Question

★★★★★

QUESTION 4 The following Trial Balance was extracted from the books of Mega Enterprise as at 31 December 2020. Particulars Debit (RM) Credit (RM) Capital 215,000 Duty on purchases 2,300 Insurance...

Answered: 1 week ago

Question

★★★★★

As the safety manager on a construction site, you have many roles. At the site, we are working we must approve the trenching and excavation plans for the subcontractors performing the work. Looking...

Answered: 1 week ago

Question

★★★★★

Write a C++ program that reads a single line of text from a file, then prints the contents of that line with the first and last characters swapped to an output file calledoutput.txt. The program...

Answered: 1 week ago

Question

★★★★★

Question 2 (1 point) A project requires the purchase of machinery for $40,000. The machinery belongs in a 20% CCA class and will have a salvage value of $4,000 at the end of the 4 year project. It...

Answered: 1 week ago

Question

★★★★★

PLEASE FOLLOW THE EXACT INSTRUCTIONS !!!!!!!! Recursion: A word is considered elfish if it contains the letters: e, l, and f in it, in any order. For example, we would say that the following words...

Answered: 1 week ago

Question

★★★★★

For liquid water the isothermal compressibility is given by; where r and b are functions of temperature only. If 1 kg of water is compressed isothermally and reversibly from I to 500 bar at 60(C. how...

Answered: 1 week ago

Question

★★★★★

4. Identify coping strategies you have used in sport that you also use in real-life nonsport situations.

Answered: 1 week ago

Question

★★★★★

3. List five stressful situations that you have experienced and identify coping strategies that you have used to address these situations. Classify these coping strategies within the two-dimensional...

Answered: 1 week ago

Question

★★★★★

14. Develop a brief training manual teaching athletes how to immediately energize themselves in preparation for competition.

Answered: 1 week ago

Previous Question Next Question