Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 19, 2024

Security A has a standard deviation of 10%. Security B has a standard deviation of 20%. The correlation of returns is 0.8. a. What is

Security A has a standard deviation of 10%. Security B has a standard deviation of 20%. The correlation of returns is 0.8.

a. What is the covariance between the two securities ?

b. What is the standard deviation of a two-security portfolio invested 40% in security A and 60% in security B?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

International Finance Transactions Policy And Regulation

Authors: Hal S. Scott

15th Edition

159941547X, 978-1599415475

More Books

Students also viewed these Finance questions

Question

★★★★★

As the financial controller of SEAS Ltd, you are responsible for preparing the companys financial statements and are at present finalising these for the year ended 31 March 20X8 for presentation to...

Answered: 1 week ago

Question

★★★★★

#1 Attempts Category Prior Year Current Year Accounts payable ??? 222 Accounts receivable 320,715 397,400 Accruals 40.500 33,750 Additional paid in capital 500,000 541.650 Cash 17.500 47,500 Common...

Answered: 1 week ago

Question

★★★★★

What counts most in explaining work-related outcomes, objective or subjective worker characteristics? Think of a concrete example when formulating your answer, for instance by focusing on predicting...

Answered: 1 week ago

Question

★★★★★

Soon after Gast purchased a used auto from a Chevrolet dealer, he experienced a series of mechanical problems with the car. Gast refused to make further payments on the bank note that had financed...

Answered: 1 week ago

Question

★★★★★

If the monthly service charge on a computer banking account is $6.95, what will be the total charge paid over a year

Answered: 1 week ago

Question

★★★★★

Company has 200,000 shares of common stock 50,000 shares a convertible preferred stock and $2 million of 10% convertible bonds outstanding during the current year the preferred stock was convertible...

Answered: 1 week ago

Question

★★★★★

Case Study: The mobile phone industry The mobile phone industry case is contained in the two Economist articles, "Battling for the palm of your hand" and "Upwardly mobile". Link:...

Answered: 1 week ago

Question

★★★★★

Jack and Jill recently negotiated a rate of 2% on their mortgage loan that has a 5-year term and 25-year amortization period. The Bank of Canada 5-year benchmark mortgage rate is 4.8%. What would be...

Answered: 1 week ago

Question

★★★★★

Question 15 Which premise doesn't address accident prevention? Accidents are always human error. O Accidents have causes. Accidents involve hazards that lead to unsafe acts and conditions. Accidents...

Answered: 1 week ago

Question

★★★★★

When analyzing the poetry of Marianne Moore, Donald Hall claims that in her view, "The raw material for poetry abounds, it is everywhere, is anything." How does the poetry of Moore and Plath express...

Answered: 1 week ago

Question

★★★★★

An imaginary object moves horizontally. The position-versus-time function represents the object's motion mathematically. Work together with your group, and when you're done or if you get stuck,...

Answered: 1 week ago

Question

★★★★★

Edward Schieffelin and Robert Crittendens Like People in a Dream is a richly told account of fi rst contact between two cultures. In 1935 white explorers went into interior parts of New Guinea where...

Answered: 1 week ago

Question

★★★★★

How do cultures and social communities shape communication?

Answered: 1 week ago

Question

★★★★★

Identify ways that you do and do not fi t generalizations for communication by members of your sex that were discussed in this chapter. What about yourace, ethnicity, sexual orientation, etc.might...

Answered: 1 week ago

Previous Question Next Question