Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider two stocks, Stock D, with an expected return of 17 percent and a standard deviation of 32 percent, and Stock I, an international company,

image text in transcribed

image text in transcribed

Consider two stocks, Stock D, with an expected return of 17 percent and a standard deviation of 32 percent, and Stock I, an international company, with an expected return of 10 percent and a standard deviation of 20 percent. The correlation between the two stocks is -0.18. What is the weight of each stock in the minimum variance portfolio? (Do not round intermediate calculations. Round your answers to 4 decimal places.) Answer is complete but not entirely correct. 0.3347 Weight of Stock D Weight of Stock / 0.6653 X The stock of Bruin, Inc., has an expected return of 24 percent and a standard deviation of 37 percent. The stock of Wildcat Co. has an expected return of 11 percent and a standard deviation of 42 percent. The correlation between the two stocks is 0.42. Calculate the expected return and standard deviation of the minimum variance portfolio. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. 16.82 X % Expected return Standard deviation X X 33.69 %

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

Finance And Sustainability

Authors: William Sun, Celine Louche, Roland Perez

1st Edition

1780520921, 978-1780520926

More Books

Students also viewed these Finance questions