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I bought MSFT at $50, today is $60 so the return in % is

a.

-20%

b.

$20

c.

20%

d.

0.2

I

bought TESLA at $80, today is $60 so the return in % is

a.

0.25

b.

-25%

c.

25%

d.

$20

I have $1500. invest $500 in Appl and the rest in Google.The percentage weight invested in Google %

a.

1000

b.

33%

c.

66%

d.

0.66%

Investor invest $8000, the return on the portfolio is 12%. The amount of money that available today to the investor

a.

9860

b.

8960

c.

960

d.

690

Investor invest equally in stock A, and stock B. The standard drviation of A is 0.3, The standard deviation of B is 45%. There is no correlation between these two stocks. The risk of the portfolio is

a.

0.0731

b.

0.27

c.

0.027

d.

23%

Expert Answer

• Shalin Shah answered this

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  2,768 answers

  1) Ans) c. 20% Return = Selling price - Buying price/Buying price = 60-50/50 = 10/50 = 0.2 i.e 20%

  2) Ans) b. -25% Return = Selling price - Buying price/Buying price = 60-80/80 = -20/80 = -0.25 i.e -25%

  3) c. 66% Percentage weight invested in google = 1 - Percentage weight invested in Apple Percentage weight invested in Apple = 500/1500 = 33.33% Thus Percentage weight invested in google = 1 -33.33% = 66.67%

  4) Ans) b. 8960 Amount of money available today = 8000(1+12%) = 8000(1.12) = 8960

  5) Ans) b. 0.27

  Standard deviation of portfolio = [Percentage weight invested in A^2 x Standard deviation of A^2 + Percentage weight invested in B^2 x Standard deviation of B^2 + 2 x Percentage weight invested in A x Percentage weight invested in B x Standard deviation of A x Standard deviation of B x corelation]^0.5

  = [0.5^2 x 30^2 + 0.5^2 x 45^2 + 2 x 0.5 x 0.5 x 30 x 45 x 0]^0.5

  = [ 0.25 x 900 +0.25 x 2025 + 0]^0.5

  = [225 + 506.25]^0.5

  = 731.25^ 0.5

  = 27.04%

  i.e 0.27