Answered step by step
Verified Expert Solution
Question
1 Approved Answer
ANSWER THE FINAL TWO QUESTIONS THAT ARE NOT FILLED IN ABOUT THE ANNUALIZED EXPECTED RETURN AND ANNUALIZED STANDARD DEVIATION AG has a $900,000 fully diversified
ANSWER THE FINAL TWO QUESTIONS THAT ARE NOT FILLED IN ABOUT THE ANNUALIZED EXPECTED RETURN AND ANNUALIZED STANDARD DEVIATION
AG has a $900,000 fully diversified portfolio. She subsequently inherits XYZ common stock worth $100,000. Her financial advisor provided her with the following information: Original Portfolio XYZ Company Expected Monthly Return 0.67% 1.25 Standard Deviation of Monthly Return 2.37% 2.95 (Please round the answer to three decimal places. For example, if you answer is 0.952%, please fill 0.952 in the slot.) The correlation coefficient of XYZ stock returns with the original portfolio returns is 0.40. The inheritance changes AG's overall portfo iO. Assuming AG keeps the XYZ stock, calculate the expected monthly return of her new portfolio which includes the XYZ stock. (Please round the answer to three decimal places. For example, if you answer is 0.952%, please fill O. 952 in the slot.) 0.728 1 point Following the previous AG question, calculate the covariance of XYZ stock returns with the original portfolio returns. (Please round the answer to five decimal places. e.g., 0.00014.) 0.00028 1 point Following the previous AG question, calculate the standard deviation of her new portfolio which includes the XYZ stock. (Please round the answer to two decimal places. For example, if you answer is 1.95%, please fill 1.95 in the slot.) 2.27 1 point Following the previous AG question, what is the annualized expected return of her new portfolio which includes the XYZ stock. (Please round the answer to two decimal places. For example, if you answer is 1.95%, please fill 1.95 in the slot.) Type your answer... 1 point Following the previous AG question, what is the annualized standard deviation of her new portfolio which includes the XYZ stock. (Please round the answer to two decimal places. For example, if you answer is 1.95%, please fill 1.95 in the slot.) Type your answer...
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