In the wonderland country, the roturn on the market portfolio is 14,45%, and standard deviation of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
In the wonderland country, the roturn on the market portfolio is 14,45%, and standard deviation of markot return is 12,1% and the risk free return is 2,65%. You may form a portfolio with the securities X, Y and Z with the following characteristics: Paramotors Beta Socurity Z Security X Security Y (B) 1.07 25,4% 1.95 0,96 total risk Portiolio weight 38,5% 25% 23,8% 40% (wi) a) Which security has the lowest total risk? (0,5 points) b) If the market return decroase 0,85%, which is the expected impact in security Y return? (0.75 points) c) Determine the expected beta and expected return of the portfolio with weights as represented in the table above. (1 point) d) Determine the unsystematic risk associated to security X. In the wonderland country, the roturn on the market portfolio is 14,45%, and standard deviation of markot return is 12,1% and the risk free return is 2,65%. You may form a portfolio with the securities X, Y and Z with the following characteristics: Paramotors Beta Socurity Z Security X Security Y (B) 1.07 25,4% 1.95 0,96 total risk Portiolio weight 38,5% 25% 23,8% 40% (wi) a) Which security has the lowest total risk? (0,5 points) b) If the market return decroase 0,85%, which is the expected impact in security Y return? (0.75 points) c) Determine the expected beta and expected return of the portfolio with weights as represented in the table above. (1 point) d) Determine the unsystematic risk associated to security X.
Expert Answer:
Related Book For
Statistics The Exploration & Analysis of Data
ISBN: 978-1133164135
7th edition
Authors: Roxy Peck, Jay L. Devore
Posted Date:
Students also viewed these finance questions
-
The (annual) expected return and standard deviation of returns for 2 assets are as follows: Asset A : E[r] 10% , SD[r] 30% Asset B : E[r] 20% , SD[r] 50% The correlation between the returns is 0.15...
-
The accompanying table gives the mean and standard deviation of reaction times (in seconds) for each of two different stimuli: If your reaction time is 4.2 seconds for the first stimulus and 1.8...
-
The accompanying table gives the mean and standard deviation of reaction times (in seconds) for each of two different stimuli: Suppose your reaction time is 4.2 seconds for the first stimulus and 1.8...
-
Randy, Inc., can issue 3-month commercial paper with a face value of $1,500,000 for $1,450,000. Transaction costs will be $1,500. The effective annualized percentage cost of the financing, based on a...
-
Consider a European electronic crossing network that runs six crosses daily, that is, the orders are matched six times a day. This network allows a participant to specify several constraints, such as...
-
A manager is applying the transportation model of linear programming to solve an aggregate planning problem. Demand in period 1 is 100 units, 100 units in period 2, and 175 units in period 3. The...
-
The following business transactions represent selected cash receipts (cash inflows) and cash payments (cash outflows) of Los Altos Cyclery. A blank form is provided in the Working Papers. Your...
-
A firm has experienced an increasing current ratio but a decreasing operating cash flow to current liabilities ratio during the last three years. What is the likely explanation for these results?
-
Three recent college graduates have formed a partnership and have opened an advertising firm. Their first project consists of activities listed in the following table. Activity Immediate Predecessor...
-
1. Anton and Beatrice are brother and sister in their twenties, living in the family home which, together with its contents, is owned by their father, Robert. Since Anton and Beatrice can remember,...
-
REASONS OF ITS OCCURANCE LAW ENFORCEMENT AFTER THE INCIDENT
-
Who can buy tradable sulfur dioxide permits? only the government only those who use electricity only electricity generators anyone?
-
Identify an industrial sector in West Africa. A paper evaluating changing location considerations for that sector. Why and how have these sectors changed since the start of the industrial revolution?
-
Research global warming. Do you believe that it really exists? Why or why not? How do you think different countries are addressing the issue? Do you believe that the United States is doing its part...
-
A convex mirror is used to reflect light from an object placed 66cm in front of the mirror. The focal point is 46cm from the mirror. What is the focal length as you would use in the mirror equation?...
-
Sundance Systems has the following transactions during July. July 5 Purchases 48 LCD televisions on account from Red River Supplies for $2,900 each, terms 3/10, n/30. July 8 Returns to Red River...
-
how to say Direct cost savings is due to lower payment to other operators (R46m) mainly due to lower roaming traffic, lower cost of handsets, equipment, and directories decreasing (R64m) resulting...
-
The maximum pressure that can be developed for a certain fluid power cylinder is 15.0 MPa. Compute the required diameter for the piston if the cylinder must exert a force of 30 kN.
-
A novel alternative medical treatment for heart attacks seeds the damaged heart muscle with cells from the patients thigh muscle (Doctors Mend Damaged Hearts with Cells from Muscles, San Luis Obispo...
-
A manufacturer of computer printers purchases plastic ink cartridges from a vendor. When a large shipment is received, a random sample of 200 cartridges is selected, and each cartridge is inspected....
-
The relationship between x = total number of salmon in a creek and y = percentage of salmon killed by bears that were transported away from the stream prior to the bear eating the salmon was examined...
-
Consider a publicly-held company whose products you are familiar with. Some examples might include: Access the companys public website and search for its most recent annual report. (Note: Some...
-
The 2014 financial statements of LVMH Moet Hennessey-Louis Vuitton S.A. are presented in Appendix C of this book. LVMH is a Paris-based holding company and one of the worlds largest and best-known...
-
San Francisco Sea Salt's controller prepared the following statements of cash flow (in thousands of dollars) for the past two years, the current year (2020), and the upcoming year (2021): After...
Study smarter with the SolutionInn App