Question
Calculate: 1) Covariance 2) Expected return on a portfolio XY 2) Risk on a portfolio XY Weight of each asset is 50%. Average annual return:
Calculate:
1) Covariance
2) Expected return on a portfolio XY
2) Risk on a portfolio XY
Weight of each asset is 50%.
Average annual return:
asset X: 11.74%
asset Y: 11.14%
Standard deviation:
asset X: 8.9
asset Y: 2.78
| Asset X | |||
| Value | |||
| Year | Cash Flow | Beginning | Ending |
| 2006 | $1,000 | $20,000 | $22,000 |
| 2007 | 1500 | 22000 | 21000 |
| 2008 | 1400 | 21000 | 24000 |
| 2009 | 1700 | 24000 | 22000 |
| 2010 | 1900 | 22000 | 23000 |
| 2011 | 1600 | 23000 | 26000 |
| 2012 | 1700 | 26000 | 25000 |
| 2013 | 2000 | 25000 | 24000 |
| 2014 | 2100 | 24000 | 27000 |
| 2015 | 2200 | 27000 | 30000 |
| Asset Y | |||
| Ending | |||
| Year | Cash Flow | Beginning | Ending |
| 2006 | $1,500 | $20,000 | $20,000 |
| 2007 | 1600 | 20000 | 20000 |
| 2008 | 1700 | 20000 | 21000 |
| 2009 | 1800 | 21000 | 21000 |
| 2010 | 1900 | 21000 | 22000 |
| 2011 | 2000 | 22000 | 23000 |
| 2012 | 2100 | 23000 | 23000 |
| 2013 | 2200 | 23000 | 24000 |
| 2014 | 2300 | 24000 | 25000 |
| 2015 | 2400 | 25000 | 25000 |
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
