Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 09, 2024

Consider an economy with two types of firms, S and I. S firms all move together. I firms move independently. For both types of firms

Consider an economy with two types of firms, S and I. S firms all move together. I firms move independently. For both types of firms there is a 26% probability that the firm will have a 11% return and a 74% probability that the firm will have a 18% return. What is the volatility (standard deviation) of a portfolio that consists of an equal investment in:

a. 35 firms of type S?

b. 35 firms of type I?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access with AI-Powered 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

Students also viewed these Finance questions

Question

8.7 Calculate the margin of error in estimating a binomial proportion for each of the following values of n. Use p = 0.5 to calculate the standard error of the estimator. a. n = 30 c. n = 400 b. n =...

Answered: 1 week ago

Question

★★★★★

Anthony spends his income on fishing lures (L) and guitar picks (G). Lures are priced at $2, while a package of guitar picks cost $1. Assume that Anthony has $30 to spend and his utility function can...

Answered: 1 week ago

Question

★★★★★

Aracel Engineering completed the following transactions in the month of June. Using the following transactions, record journal entries, create financial statements, and assess the impact of each...

Answered: 1 week ago

Question

★★★★★

Evaluate cos (a+) with the information below. cos (a) = 24 25 (a in the fourth quadrant) and sin (B)= -5 12 ( in the third quadrant) cos (a + B)= (Simplify your answer. Type an exact answer, using...

Answered: 1 week ago

Question

★★★★★

Question #8 of 50 Question ID: 1158320 Registered principal Jane has just received a recommendation from Charlotte for the purchase of a deferred variable annuity for Charlotte's client, William....

Answered: 1 week ago

Question

★★★★★

A bike assembly line in a manufacturing system uses 400 pedals per day. Pedals can be produced at a rate of 800 units per day. The shop operates 20 days a month. Assume that demand is uniform...

Answered: 1 week ago

Question

★★★★★

The year is 2030, and the rate of change has continued to exponentially increase over the last few years. Select a current organization that you believe will still be successful in the year 2030. I...

Answered: 1 week ago

Question

★★★★★

a company that operates for 50 weeks in a year is concerned about its stocks of copper cable. This costs rs. 240 a meter and there is a demand for 8000 meters a week . Each replenishment costs rs....

Answered: 1 week ago

Question

★★★★★

25) A coffee shop operates 7 days per week and needs to determine how many workers (full-time equivalent, FTE) employees to staff. Employees work 12 hour shifts. A FTE is defined as an employee that...

Answered: 1 week ago

Previous Question Next Question