Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are planning to make investment into three stocks, stock A, stock B and stock C. If the following information is given for them (KA:

You are planning to make investment into three stocks, stock A, stock B and stock C. If the following information is given for them (KA: Rate of return of stock A): Variance(KA)=120 Variance(KB)=286 Variance(KC)=125 Covariance(KA, KB)= - 98 Covariance (KA, Kc)=260 Covariance (KC, KB)=118 If you form a portfolio investing 5% of your savings into stock A (WA=5%), 5% of your savings into stock B (WB=5%) and 90% of your savings into stock C (WC=90%), what will be the standard deviation of rate of return of your portfolio? (Answer is rounded)

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

Fundamentals Of Multinational Finance

Authors: Michael H. Moffett, Arthur I. Stonehill, David K. Eiteman

3rd Edition

0321541642, 9780321541642

More Books

Students also viewed these Finance questions

Question

Describe the major functions of sales management. AppendixLO1

Answered: 1 week ago