{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-09-13T00:05:58-04:00", "answer_date": "2024-09-13 00:05:58", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "10522242", "url": "\/study-help\/questions\/the-following-are-monthly-percentage-price-changes-for-four-market-10522242", "question_creation_date_js": "2024-09-13T00:05:58-04:00", "question_creation_date": "Sep 13, 2024 12:05 AM", "meta_title": "[Solved] The following are monthly percentage pric | SolutionInn", "meta_description": "Answer of - The following are monthly percentage price changes for four market indexes. Month DJIA S&P 5 0 0 Russell 2 0 0 0 Nikke | SolutionInn", "meta_keywords": "monthly,percentage,price,four,market,indexes,month,djia,s,5,russell,2", "question_title_h1": "The following are monthly percentage price changes for four market indexes. Month DJIA S&P 5 0 0 Russell 2 0 0 0 Nikkei 1 0", "question_title": "The following are monthly percentage price changes for four market indexes. Month", "question_title_for_js_snippet": "The following are monthly percentage price changes for four market indexes Month DJIA S P 5 0 0 Russell 2 0 0 0 Nikkei 1 0 0 4 0 0 2 0 0 3 0 0 3 2 0 0 8 0 0 7 0 1 2 0 0 1 3 0 0 3 0 0 1 0 0 4 0 0 7 4 0 0 1 0 0 2 0 0 2 0 0 2 5 0 0 4 0 0 3 0 1 4 0 0 2 6 0 0 7 0 0 6 0 1 0 0 0 6 Compute the following Average monthly rate of return for each index Round your answers to five decimal places DJIA S P 5 0 0 Russell 2 0 0 0 Nikkei Standard deviation for each index Do not round intermediate calculations Round your answers to four decimal places DJIA S P 5 0 0 Russell 2 0 0 0 Nikkei Covariance between the rates of return for the following indexes Use a minus sign to enter negative values, if any Do not round intermediate calculations Round your answers to six decimal places Covariance ( DJIA , S P 5 0 0 ) Covariance ( S P 5 0 0 , Russell 2 0 0 0 ) Covariance ( S P 5 0 0 , Nikkei ) Covariance ( Russell 2 0 0 0 , Nikkei ) The correlation coefficients for the same four combinations Use a minus sign to enter negative values, if any Do not round intermediate calculations Round your answers to four decimal places Correlation ( DJIA , S P 5 0 0 ) Correlation ( S P 5 0 0 , Russell 2 0 0 0 ) Correlation ( S P 5 0 0 , Nikkei ) Correlation ( Russell 2 0 0 0 , Nikkei ) Using the unrounded answers from parts ( a ) , ( b ) , and ( d ) , calculate the expected return and standard deviation of a portfolio consisting of equal parts of ( 1 ) the S P and the Russell 2 0 0 0 and ( 2 ) the S P and the Nikkei Do not round intermediate calculations Round your answers to five decimal places Expected return ( S P 5 0 0 and Russell 2 0 0 0 ) Standard deviation ( S P 5 0 0 and Russell 2 0 0 0 ) Expected return ( S P 5 0 0 and Nikkei ) Standard deviation ( S P 5 0 0 and Nikkei ) Since S P 5 0 0 and Russell 2 0 0 0 have a strong Select correlation, meaningful reduction in risk Select if they are combined Since S P 5 0 0 and Nikkei have a strong Select correlation, meaningful reduction in risk Select if they are combined ", "question_description": "
The following are monthly percentage price changes for four market indexes.<\/span><\/div>
<\/div>
Month DJIA S&P <\/span>5<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> Russell <\/span>2<\/mn>0<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> Nikkei<\/span> <\/div>
1<\/mn><\/mtext>0<\/mn>.<\/mn>0<\/mn>4<\/mn><\/mtext><\/mtext>0<\/mn>.<\/mn>0<\/mn>2<\/mn><\/mtext><\/mtext>0<\/mn>.<\/mn>0<\/mn>3<\/mn><\/mtext><\/mtext>0<\/mn>.<\/mn>0<\/mn>3<\/mn><\/mrow><\/math> <\/span> <\/div>
2<\/mn><\/mtext>0<\/mn>.<\/mn>0<\/mn>8<\/mn><\/mtext><\/mtext>0<\/mn>.<\/mn>0<\/mn>7<\/mn><\/mtext><\/mtext>0<\/mn>.<\/mn>1<\/mn>2<\/mn><\/mtext><\/mtext>-<\/mo>0<\/mn>.<\/mn>0<\/mn>1<\/mn><\/mrow><\/math> <\/span> <\/div>
3<\/mn><\/mtext>-<\/mo>0<\/mn>.<\/mn>0<\/mn>3<\/mn><\/mtext><\/mtext>-<\/mo>0<\/mn>.<\/mn>0<\/mn>1<\/mn><\/mtext><\/mtext>-<\/mo>0<\/mn>.<\/mn>0<\/mn>4<\/mn><\/mtext><\/mtext>0<\/mn>.<\/mn>0<\/mn>7<\/mn><\/mrow><\/math> <\/span> <\/div>
4<\/mn><\/mtext>0<\/mn>.<\/mn>0<\/mn>1<\/mn><\/mtext><\/mtext>0<\/mn>.<\/mn>0<\/mn>2<\/mn><\/mtext><\/mtext>0<\/mn>.<\/mn>0<\/mn>2<\/mn><\/mtext><\/mtext>0<\/mn>.<\/mn>0<\/mn>2<\/mn><\/mrow><\/math> <\/span> <\/div>
5<\/mn><\/mtext>0<\/mn>.<\/mn>0<\/mn>4<\/mn><\/mtext><\/mtext>0<\/mn>.<\/mn>0<\/mn>3<\/mn><\/mtext><\/mtext>0<\/mn>.<\/mn>1<\/mn>4<\/mn><\/mtext><\/mtext>0<\/mn>.<\/mn>0<\/mn>2<\/mn><\/mrow><\/math> <\/span> <\/div>
6<\/mn><\/mtext>-<\/mo>0<\/mn>.<\/mn>0<\/mn>7<\/mn><\/mtext><\/mtext>-<\/mo>0<\/mn>.<\/mn>0<\/mn>6<\/mn><\/mtext><\/mtext>-<\/mo>0<\/mn>.<\/mn>1<\/mn>0<\/mn><\/mtext><\/mtext>0<\/mn>.<\/mn>0<\/mn>6<\/mn><\/mrow><\/math> <\/span> <\/div>
Compute the following.<\/span><\/div>
<\/div>
Average monthly rate of return for each index. Round your answers to five decimal places.<\/span><\/div>
DJIA: <\/span><\/div>
<\/div>
S&P <\/span>5<\/mn>0<\/mn>0<\/mn><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Russell <\/span>2<\/mn>0<\/mn>0<\/mn>0<\/mn><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Nikkei: <\/span><\/div>
<\/div>
Standard deviation for each index. Do not round intermediate calculations. Round your answers to four decimal places.<\/span><\/div>
DJIA: <\/span><\/div>
<\/div>
S&P <\/span>5<\/mn>0<\/mn>0<\/mn><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Russell <\/span>2<\/mn>0<\/mn>0<\/mn>0<\/mn><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Nikkei: <\/span><\/div>
<\/div>
Covariance between the rates of return for the following indexes. Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to six decimal places.<\/span><\/div>
Covariance <\/span>(<\/mi><\/mrow><\/math>DJIA<\/span>,<\/mo><\/mrow><\/math> S&P <\/span>5<\/mn>0<\/mn>0<\/mn>)<\/mi><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Covariance <\/span>(<\/mi><\/mrow><\/math>S&P <\/span>5<\/mn>0<\/mn>0<\/mn>,<\/mo><\/mrow><\/math> Russell <\/span>2<\/mn>0<\/mn>0<\/mn>0<\/mn>)<\/mi><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Covariance <\/span>(<\/mi><\/mrow><\/math>S&P <\/span>5<\/mn>0<\/mn>0<\/mn>,<\/mo><\/mrow><\/math> Nikkei<\/span>)<\/mi><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Covariance <\/span>(<\/mi><\/mrow><\/math>Russell <\/span>2<\/mn>0<\/mn>0<\/mn>0<\/mn>,<\/mo><\/mrow><\/math> Nikkei<\/span>)<\/mi><\/mrow><\/math>: <\/span> <\/div>
<\/div>
The correlation coefficients for the same four combinations. Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to four decimal places.<\/span><\/div>
Correlation <\/span>(<\/mi><\/mrow><\/math>DJIA<\/span>,<\/mo><\/mrow><\/math> S&P <\/span>5<\/mn>0<\/mn>0<\/mn>)<\/mi><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Correlation <\/span>(<\/mi><\/mrow><\/math>S&P <\/span>5<\/mn>0<\/mn>0<\/mn>,<\/mo><\/mrow><\/math> Russell <\/span>2<\/mn>0<\/mn>0<\/mn>0<\/mn>)<\/mi><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Correlation <\/span>(<\/mi><\/mrow><\/math>S&P <\/span>5<\/mn>0<\/mn>0<\/mn>,<\/mo><\/mrow><\/math> Nikkei<\/span>)<\/mi><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Correlation <\/span>(<\/mi><\/mrow><\/math>Russell <\/span>2<\/mn>0<\/mn>0<\/mn>0<\/mn>,<\/mo><\/mrow><\/math> Nikkei<\/span>)<\/mi><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Using the unrounded answers from parts <\/span>(<\/mi><\/mrow><\/math>a<\/span>)<\/mi>,<\/mo><\/mtext>(<\/mi><\/mrow><\/math>b<\/span>)<\/mi>,<\/mo><\/mrow><\/math> and <\/span>(<\/mi><\/mrow><\/math>d<\/span>)<\/mi>,<\/mo><\/mrow><\/math> calculate the expected return and standard deviation of a portfolio consisting of equal parts of <\/span>(<\/mi>1<\/mn>)<\/mi><\/mrow><\/math> the S&P and the Russell <\/span>2<\/mn>0<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> and <\/span>(<\/mi>2<\/mn>)<\/mi><\/mrow><\/math> the S&P and the Nikkei. Do not round intermediate calculations. Round your answers to five decimal places.<\/span> <\/div>
Expected return <\/span>(<\/mi><\/mrow><\/math>S&P <\/span>5<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> and Russell <\/span>2<\/mn>0<\/mn>0<\/mn>0<\/mn>)<\/mi><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Standard deviation <\/span>(<\/mi><\/mrow><\/math>S&P <\/span>5<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> and Russell <\/span>2<\/mn>0<\/mn>0<\/mn>0<\/mn>)<\/mi><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Expected return <\/span>(<\/mi><\/mrow><\/math>S&P <\/span>5<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> and Nikkei<\/span>)<\/mi><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Standard deviation <\/span>(<\/mi><\/mrow><\/math>S&P <\/span>5<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> and Nikkei<\/span>)<\/mi><\/mrow><\/math>: <\/span> <\/div>
<\/div>
Since S&P <\/span>5<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> and Russell <\/span>2<\/mn>0<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> have a strong <\/span> <\/div>
-<\/mo><\/mrow><\/math>Select<\/span>-<\/mo><\/mrow><\/math> <\/div>
correlation, meaningful reduction in risk <\/span><\/div>
-<\/mo><\/mrow><\/math>Select<\/span>-<\/mo><\/mrow><\/math> <\/div>
if they are combined.<\/span><\/div>
<\/div>
Since S&P <\/span>5<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> and Nikkei have a strong <\/span> <\/div>
-<\/mo><\/mrow><\/math>Select<\/span>-<\/mo><\/mrow><\/math> <\/div>
correlation, meaningful reduction in risk <\/span><\/div>
-<\/mo><\/mrow><\/math>Select<\/span>-<\/mo><\/mrow><\/math> <\/div>
if they are combined.<\/span><\/div><\/span> <\/div><\/div> \"image", "transcribed_text": "", "related_book": { "title": null, "isbn": null, "edition": null, "authors": null, "cover_image": null, "uri": null, "see_more_uri": "" }, "free_related_book": { "isbn": "", "uri": "", "name": "", "edition": "" }, "question_posted": "2024-09-13 00:05:58", "see_more_questions_link": "\/study-help\/questions\/business-marketing-2022-June-08", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/study-help\/industrial-organizational-psychology-understanding-the-workplace\/what-are-some-critical-normative-life-events-that-affect-friendship-2003137", "description": "What are some critical normative life events that affect friendship? Are the effects for women and men the same?", "stars": 0 }, { "url": "\/large-orange-company-produces-basketballs-it-incurred-the-following-costs", "description": "Large Orange Company produces basketballs. It incurred the following costs during the year. Direct materials ............... $14,490 Direct labor ................ $25,530 Fixed manufacturing overhead...", "stars": 3 }, { "url": "\/study-help\/questions\/the-following-are-monthly-percentage-price-changes-for-four-market-10522242", "description": "The following are monthly percentage price changes for four market indexes. Month DJIA S&P 5 0 0 Russell 2 0 0 0 Nikkei 1 0 . 0 4 0 . 0 2 0 . 0 3 0 . 0 3 2 0 . 0 8 0 . 0 7 0 . 1 2 - 0 . 0 1 3 - 0 . 0...", "stars": 3 }, { "url": "\/study-help\/questions\/long-term-debt-financing-oregon-co-just-agreed-to-a-6701747", "description": "Long term debt financing. Oregon Co. just agreed to a long-term deal in which it will export products to Japan. It needs to finance the production of the products it will export. The products will be...", "stars": 3 }, { "url": "\/study-help\/business-essentials\/if-you-own-a-5000-bond-that-has-a-coupon-1326772", "description": "If you own a $5,000 bond that has a coupon of 4 percent and pays interest semiannually, how much interest would you receive? a. $200 every six months b. $200 once a year c. $200 every two years d....", "stars": 3 }, { "url": "\/study-help\/computer-organization-design\/compare-the-resiliency-to-failure-of-ncube-to-a-fully-1157944", "description": "Compare the resiliency to failure of n-cube to a fully- connected interconnection network. Plot a comparison of reliability as a function of the added number of links for the two topologies. Refer to...", "stars": 3 }, { "url": "\/study-help\/statistical-techniques-in-business-\/write-the-kalman-filter-equations-for-an-operatornamear1-process-written-1409237", "description": "Write the Kalman filter equations for an \\(\\operatorname{AR}(1)\\) process written is state space form with \\(H_{t}=1, \\alpha_{t}=z_{t}\\) and \\(V_{t}=0, \\Omega_{t}=\\phi, R_{t}=\\sigma_{a}^{2}\\). Show...", "stars": 3 }, { "url": "\/study-help\/particle-physics\/a-wire-bent-into-a-circular-arc-of-radius-r-1369963", "description": "A wire bent into a circular arc of radius \\(R\\) subtending an angle \\(\\phi\\) carries a current of magnitude \\(I\\) (Figure 28.35). Use the Biot-Savart law to derive an expression for the magnitude of...", "stars": 3 }, { "url": "\/study-help\/fundamental-accounting-\/as-of-may-31-2011-the-bank-statement-showed-an-1433910", "description": "As of May 31, 2011, the bank statement showed an ending balance of \\(\\$ 17,250\\). The unadjusted Cash account balance was \\(\\$ 16,450\\). The following information is available: 1. Deposit in transit,...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/a-cookie-jar-is-1415-full-of-cookies-fiveeighths-of-10522241", "next": "\/study-help\/questions\/find-the-interest-rate-on-a-loan-charging-720-simple-10522243" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Finance", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-finance" }, { "name": "The following are monthly percentage price changes for four market indexes. Month", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/the-following-are-monthly-percentage-price-changes-for-four-market-10522242" } ], "skill_details": { "skill_id": "13", "skill_name": "Finance", "parent_id": "1" } } } }