Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Feb 26, 2024

Calculate the Standard Deviation of a portfolio consisting of 25% stock A and 75% stock B. Stock SD Corr A,B = 0.24 A 30% B

Calculate the Standard Deviation of a portfolio consisting of 25% stock A and 75% stock B.

Stock	SD	Corr A,B = 0.24
A	30%
B	50%

NOTE: the correct answer is 39.97%, but I am more interested in the correct formula and process of solving the question. Please show all work and calculations, Thank you!

Step by Step Solution

★★★★★

3.39 Rating (158 Votes )

There are 3 Steps involved in it

Step: 1

Heres the correct formula and process for calculating the standard deviation of a portfolio consisti... 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

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

Introduction to Corporate Finance

Authors: Scott B. Smart, William L Megginson

2nd edition

9780324658958, 0324658958, 978-0324657937

More Books

Students also viewed these Finance questions

Question

(4) A typical long-chain fatty acid has the following chemical formula (CH3(CH2) COOH). (a) (2 pts) Identify and underline the dissociable H+. (b) (2 pts) Write the chemical formula again but in its...

Answered: 1 week ago

Question

★★★★★

Calculate the standard deviation of a portfolio consisting of 20% invested in A Inc. with E(r)=8% and Stdev= 40% and the rest invested in B Corp. with E(r)=12% and Stdev=20%, if the two stocks...

Answered: 1 week ago

Question

★★★★★

CoursHeroTranscribedText: A 5-year loan in the amount of $48,000 is to be repaid in equal annual payments. What is the remaining principal balance after the third payment if the interest rate is 5...

Answered: 1 week ago

Question

★★★★★

On January 15, Tundra Co. sold merchandise to customers for cash of $42,000 (cost $28,500). Merchandise costing $10,500 was sold to customers for $15,800 on January 17; terms 2/10, n/30. Sales...

Answered: 1 week ago

Question

★★★★★

Compile a list of places that can be called to report credit practices, to get advice, help with credit problems, and to check out a creditor's reputation before signing a contract.

Answered: 1 week ago

Question

★★★★★

On January 1, 2019, Seaver Company sold land with a book value of $23,000 to Bench Company. Bench paid $15,000 down and signed a $15,000 non-interest-bearing note, payable in two $7,500 annual...

Answered: 1 week ago

Question

★★★★★

What was Aristotles approach to the soul body question?

Answered: 1 week ago

Question

★★★★★

Explain the role of secondary data in gaining customer insights. Where do marketers obtain secondary data, and what are the potential problems in using such data?

Answered: 1 week ago

Question

★★★★★

Woodward Corporation reported pretax book income of $1,095,000. Included in the computation were favorable temporary differences of $255,000, unfavorable temporary differences of $78.000, and...

Answered: 1 week ago

Question

★★★★★

A closed surface is constructed in the space between two large parallel metal plates, where there is a constant electric field E. The magnitude of the field is |E| = 1530 N/C. The numbers (1), (2),...

Answered: 1 week ago

Question

★★★★★

b. Suppose you are considering two possible investmentopportunities: a 12-year Treasury bond and a 7-year, A-ratedcorporate bond. The current real risk-free rate is 4%, andinflation is expected to 2...

Answered: 1 week ago

Question

★★★★★

Concept of Value Chain. The phrase "value chain" refers to all of the commercial activities and procedures that go into making a product or providing a service. A value chain can include all stages...

Answered: 1 week ago

Question

★★★★★

Calculate the following expressing all answers in lowest terms: 1. 777 = 2. 3 3-3 3. Find the first derivative: f(x) = 4x + 7 4. Find the first derivative: h(x) = 2 5. Find the first derivative: g(x)...

Answered: 1 week ago

Question

★★★★★

The average retirement age in America is 64 years old. Do small business owners retire at an older average age? The data below shows the results of a survey of small business owners who have recently...

Answered: 1 week ago

Question

★★★★★

The average accident on a certain road section is at 2.4 per day, what is the probability that there will be 12 accidents in a week? A bus company operates both a walk-in and online booking to...

Answered: 1 week ago

Question

★★★★★

Step 3: Analyze and document control plane logical configuration features. Analyze the configurations of the devices for control plane features such as routing protocols, First Hop Redundancy...

Answered: 1 week ago

Question

★★★★★

The equity sections for Atticus Group at the beginning of the year (January 1) and end of the year (December 31) follow. Stockholders Equity (January 1) Common stock$5 par value, 100,000 shares...

Answered: 1 week ago

Question

★★★★★

An example of prescriptive analytics is when an action is recommended based on previously observed actions. For example, an analysis might help determine procedures to follow when new accounts are...

Answered: 1 week ago

Question

★★★★★

How can you find the number of time periods needed to repay: (a) A single-payment loan and (b) An installment loan requiring equal annual end-of-year payments?

Answered: 1 week ago

Question

★★★★★

Use the following table of cash flows to answer parts a - c. Assume an 8 percent discount rate. End of Year . Cash Flow 1 $10,000 2 10,000 3 10,000 4 12,000 5 12,000 6 12,000 7 12,000 8 ...

Answered: 1 week ago

Question

★★★★★

Explain why the yield spread on corporate bonds versus Treasury bonds must always be positive. How do these spreads change (a) as the bond rating declines and (b) as the time to maturity increases?

Answered: 1 week ago

Question

★★★★★

Create risk profiles and cumulative risk profiles for all possible strategies in Figure 4.44. Is one strategy stochastically dominant? Explain.

Answered: 1 week ago

Question

★★★★★

Reconsider Hugh Liedtkes decision as diagrammed in Figure 4.2. Note that three strategies are possible: (1) accept $2 billion, (2) counteroffer$5 billion and then accept $3 billion if Texaco...

Answered: 1 week ago

Question

★★★★★

Reconsider the summer-intern decision discussed in Chapter 3. Figure 3.4 shows the fundamental and means objectives. With a group of friends, use these objectives, together with brainstorming, to...

Answered: 1 week ago

Previous Question Next Question