FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider a portfolio that contains two stocks. Stock A has an expected return of 30% and a standard deviation of 76%. Stock B has an

Consider a portfolio that contains two stocks. Stock "A" has an expected return of 30% and a standard deviation of 76%. Stock "B" has an expected return of 5% and a standard deviation of 53%. The proportion of your wealth invested in stock "A" is 75%. The correlation between the two stocks is -1.

What is the expected return of the portfolio? Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your response below rounded to 2 DECIMAL PLACES.

What is the standard deviation of the portfolio? Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your response below rounded to 2 DECIMAL PLACES.

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

Step: 3

blur-text-image

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

Quantum Economics And Finance

Quantum Economics And Finance

Authors: David Orrell

3rd Edition

1916081630, 978-1916081635

More Books

Students also viewed these Finance questions

Question

★★★★★
Comparing Companies within an Industry Refer to the financial statements of American Eagle Outfitters in Appendix B, Urban Outfitters in Appendix C, and the Industry Ratio Report in Appendix D at the...

Answered: 1 week ago

Question

★★★★★
Repeat the requirements in E11- 14 assuming that Kurtis Koal Company, Inc. acquired the asset on August 1 of the current year. Use partial- year depreciation without adopting any of the acceptable...

Answered: 1 week ago

Question

★★★★★
2. Childrens language problems are sometimes associated with impoverished parentchild interactions. Why cant we conclude that the quality of parentchild interactions causes these language problems?

Answered: 1 week ago

Question

★★★★★
As the media landscape continues to change, and advertisers shift more and more of their monies into new media, there are those who predict that some traditional media like TV and newspapers may not...

Answered: 1 week ago

Question

★★★★★
Choose the items that are true regarding corporations and/or shareholders (select all that apply): When a company incorporates, it creates a new legal entity in the eyes of the law: If a corporation...

Answered: 1 week ago

Question

★★★★★
Answers for all Debenture tutorial question MariMara Sdn Bhd (MMSB) had issued debentures to three creditors namely Man, Min and Mud. Consider the following situations: i) Man, a first creditor lent...

Answered: 1 week ago

Question

★★★★★
Which of the following statements are true? i) The variance-covariance matrix has the corresponding covariances in the main diagonal. ii) The variance-covariance matrix can be used to estimate the...

Answered: 1 week ago

Question

★★★★★
Question 12 Identify the correct statement about an arm's-length transaction. 1 pts It is a transaction involving a party that is controlled by another entity and does not act on its own behalf. It...

Answered: 1 week ago

Question

★★★★★
Jack and Jill need to save $8600 toward a new car. How long willit take them if they save $280 a month earning an annual interestof 6.7% (compounded monthly)? (Treat as an ordinary annuity.)(State 1...

Answered: 1 week ago

Question

★★★★★
a) Derive the midpoint average equation fn-1 + fn+1 2 from the Taylor series expansion of fn-1 and fn+1 centered at fn- b) What is the accuracy of this approximation? Justify.

Answered: 1 week ago

Question

★★★★★
An ad for Hydroxycut, a dietary supplement sold as a weight loss aid, depicts a handsome man with an open shirt with ripped abdominal muscles who claims that he "was shocked at how fast Hydroxycut...

Answered: 1 week ago

Question

★★★★★
List three characteristics of a high-performance work system in a healthcare organization. Be specific. How can HRM play a role in this process?

Answered: 1 week ago

Question

★★★★★
Do you think physicians should have unions? Why or why not?

Answered: 1 week ago

Question

★★★★★
Discuss the different types of due process approaches. What experiences have you had with these approaches?

Answered: 1 week ago

Previous Question Next Question