Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume you create a portolio Q, with investment proportions of 0.50 in a risky poutfollo P,0.20 in the market index, and 0.30 in T.bill. Portfolio

image text in transcribed
Assume you create a portolio Q, with investment proportions of 0.50 in a risky poutfollo P,0.20 in the market index, and 0.30 in T.bill. Portfolio Pis composed of 70% Stock A and 30% Stock B. Required: a. What is the standard deviation of portelos Q ? Note: Calculate using numbers in decimal form, not percentages. For exomple use " 20 for calculation if standard deviotion is provided as 20% Do not round intermediove colculotions. Round your answer to 2 decimal places. b. What is the beta of portiolio Q? Note: Celculate using numbers in decimal form, not percentoges. For exomple use "20" for colculation if standard deviation is provided os 20%, Oo not round intermediete calculations. Round your onswer to 2 decimel places. c. What is the "firm-specific" tisk of portiolio Q ? Note: Calculete using numbers in decimal form, not percentages. For example use "20" for calculation if standard deviation is. provided as 20% Do not round intermedinte colculotions. Round your answer to 4 decimal places. d. What is the covarlance between the portiolio and the market index? Note: Calculote using numbers in decimal form, not percentoges. For exemple use "20" for calculation if standard deviation is provided as 20%. Do not round intermediate calculations. Round your answer to 2 decimal ploces

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_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

Public Finance In Theory And Practice

Authors: Holley Ulbrich

2nd Edition

041558597X, 978-0415585972

More Books

Students also viewed these Finance questions

Question

What triggers the confl ict in this scene?

Answered: 1 week ago