Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

DO IN EXCEL The correlation between the returns of three stocks A, B, C are given in the following tables: The expected rates of returns

DO IN EXCEL
image text in transcribed
The correlation between the returns of three stocks A, B, C are given in the following tables: The expected rates of returns on A,B, and C are 16%,12%, and 15% respectively. The corresponding standard deviations of the returns are 25%,22%, and 25%. a. What is the standard deviation of a portfolio invested 25% in stock A, 25\% in stock B, and 50% in Stock C ( 17.80%) b. You plan to invest 50% of your money in the portfolio constructed the part aland 50% in the risk-free assets. The risk-free interest rate is 6%. What is the expected return on this investment? What is the standard deviation of the returns on this investment? (9.75%,8.9%)

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

Personal Finance

Authors: Jack Kapoor, Les Dlabay, Robert J. Hughes, Arshad Ahmad, Jordan Fortino

7th Canadian Edition

1259650650, 978-1259650659

More Books

Students also viewed these Finance questions

Question

Have you kept/did you keep all your agreements? Explain.

Answered: 1 week ago