FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

We have a portfolio made by two risky assets. Stock A has a standard deviation of 20%. Stock B has a standard deviation of return

image text in transcribed
We have a portfolio made by two risky assets. Stock A has a standard deviation of 20%. Stock B has a standard deviation of return of 15%. The correlation coefficient between the returns of A and B is 0.4. The risk-free rate of return is 5%. What is the risk of your portfolio (standard deviation of your portfolio)? weight of each asset A and B in your portfolio is 50%. 14.7% 15.3% 11.9% 12.9%

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

Money, Banking, Financial Markets & Institutions

Money, Banking, Financial Markets & Institutions

Authors: Michael Brandl

2nd Edition

1337904821, 9781337904827

More Books

Students also viewed these Finance questions

Question

★★★★★
Defend the statement that the first step in making project management work must be a complete definition of the boundaries across which the project manager must interact.

Answered: 1 week ago

Question

★★★★★
Are certain market segments more likely to be vegetarian? (AACSB: Written and Oral Communication; Information Technology; Reflective Thinking)

Answered: 1 week ago

Question

★★★★★
Let A, B, and C be three events on a sample space . Examine, possibly with the aid of Venn diagrams, which of the following results are always true: (i) (A AB)B = AB; (ii) (A B)C = ABC; (iii) (AB)C...

Answered: 1 week ago

Question

★★★★★
Marge Simons won a $15 million lottery and elected to receive her winnings in 30 equal installments. After receiving the first 10 installments, Marge and her husband divorced, and the remaining 20...

Answered: 1 week ago

Question

★★★★★
In 2025, Carla Vista Company discovered an error while preparing its 2025 financial statements. A building constructed at the beginning of 2024 costing $1290000 has not been depreciated. The...

Answered: 1 week ago

Question

★★★★★
A CRM is thinking about launching a new product. The initial investment in equipment is $700,000. The project has an estimated life of five years. The revenue per year is estimated to be $400,000,...

Answered: 1 week ago

Question

★★★★★
Explain the concept of shear force and bending moment in beams.

Answered: 1 week ago

Question

★★★★★
What is the significance of the modulus of elasticity in structural engineering?

Answered: 1 week ago

Question

★★★★★
What are the primary types of loads considered in structural design?

Answered: 1 week ago

Question

★★★★★
Icebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1, 2020, with payment of 22,000 dinars to be made on March 1, 2021. The materials are consumed...

Answered: 1 week ago

Question

★★★★★
solve all parts. C1 Anne and Bill like strawberries x and chocolate y. Anne starts with an endowment of X kilos outof strawberries and Bill starts with an endowment of Y kilos of chocolate. Anne and...

Answered: 1 week ago

Question

★★★★★
Quantitative data is the term used to describe: a All the data you include in your research report. b Charts and tables. c Statistical tests. d Data in the form of numbers and measures.

Answered: 1 week ago

Question

★★★★★
What sources of quantitative data may already be available that might be relevant to your research questions? How can you go about accessing and evaluating them?

Answered: 1 week ago

Question

★★★★★
What explanations of the data might be organisationally preferred? What alternative explanations might there be? What might enhance your ability to develop and evaluate a range of explanations as...

Answered: 1 week ago

Previous Question Next Question