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

Question

1 Approved Answer

You decide to invest in a portfolio consisting of 15 percent Stock X, 36 percent Stock Y, and the remainder in Stock Z. Based on

You decide to invest in a portfolio consisting of 15 percent Stock X, 36 percent Stock Y, and the remainder in Stock Z. Based on the following information, what is the standard deviation of your portfolio?

State of Economy Probability of State of Economy Return if State Occurs
Stock X Stock Y Stock Z
Normal 0.77   9.00% 2.40% 11.40%
Boom 0.23 16.30% 24.30% 15.80%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

To calculate the standard deviation of the portfolio we first need to calculate the expected return ... 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_2

Step: 3

blur-text-image_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

Corporate Finance

Corporate Finance

Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe

3rd Edition

0077173635, 9780077173630

More Books

Students also viewed these Finance questions

Question

★★★★★
In a celebrated takeover case, an investor with significant wealth made a public offer to purchase the stock of one of the major automakers for $44 per share when that same stock was trading at only...

Answered: 1 week ago

Question

★★★★★
You have $6,000 to invest, and you do not need to collect on your investment for 21 years. . Option 1: You can buy a zero coupon bond with a face value of $14,000 that matures in 21 years. . Option...

Answered: 1 week ago

Question

★★★★★
You decide to invest in a portfolio consisting of 30 percent Stock A, 30 percent Stock B, and the remainder in Stock C. Based on the following information, what is the expected return of your...

Answered: 1 week ago

Question

★★★★★
Titanium metal requires a photon with a minimum energy of 6.94 10 - 19 J to emit electrons. (a) What is the minimum frequency of light necessary to emit electrons from titanium via the photoelectric...

Answered: 1 week ago

Question

★★★★★
The South division of the Laminx Company reported net income of $420,000 in March on sales of $810,000. If this division was not charged interest expense and reported a return on investment of 13%...

Answered: 1 week ago

Question

★★★★★
Which of the following is not one of the three elements of fraud? a. Perceived pressure. b. Perceived opportunity. c. Rationalization. d. Intelligence.

Answered: 1 week ago

Question

★★★★★
90. The number of accidents in each period is a Poisson random variable with mean 5. With Xn, n 1, equal to the number of accidents in period n, find E[N] when (a) N = min (n: Xn2 = 2, Xn1 = 1, Xn =...

Answered: 1 week ago

Question

★★★★★
Lemon Auto Wholesalers had sales of $1,000,000 in 2013 and cost of goods sold represented 78 percent of sales. Selling and administrative expenses were 12 percent of sales. Depreciation expense was...

Answered: 1 week ago

Question

★★★★★
Need reward to volatility ratio for question 3 and I need parts D and E from question 5. 4.00 points A pension tund managers oorsidenng three mutual trds. The first 's a stock hnd the second b a kng...

Answered: 1 week ago

Question

★★★★★
Evaluate each of the following. 12 + 6 3

Answered: 1 week ago

Question

★★★★★
On September 1 of the current year, Scots Company experienced a flood that destroyed the company's entire inventory. Because the company had not completed its month end reporting for August, it must...

Answered: 1 week ago

Question

★★★★★
obin is filling out a performance review form for his employee, Sally, who has made more sales than anyone else in the department. Since Sally has very good sales skills, Robin rates Sally high...

Answered: 1 week ago

Question

★★★★★
Section Four 10 points Directions: Using your knowledge of contract formation and defenses, please review the following scenarios and state whether there is a valid contract, that is an offer,...

Answered: 1 week ago

Question

★★★★★
This week, your assignment is to create a crisis management plan for either your organization or for Dalton, Walton, and Carlton, Inc. When constructing your plan, think about what needs to be done...

Answered: 1 week ago

Question

★★★★★
1) An altimeter is a device that measures the height of a plane above the ground. It works based on air pressure according to the formula h = 18400log where h is the height above the ground in...

Answered: 1 week ago

Question

★★★★★
Lets put on our trainer hats and compose a brief training script on critical concepts in legal and ethical issues in the workplace. Select 1 of the following questions. Make sure you define your...

Answered: 1 week ago

Question

★★★★★
The insured will receive replacement cost on the dwelling only if: A. Insurance is carried which is 100% of the value of the dwelling at the time of the loss B. Insurance is carried which is 90% of...

Answered: 1 week ago

Question

★★★★★
State whether each of the following will increase or decrease the power of a one-way between-subjects ANOVA. (a) The effect size increases. (b) Mean square error decreases. (c) Mean square between...

Answered: 1 week ago

Question

★★★★★
Your investment portfolio has earned returns of 400 per cent once in the last 10 years, zero per cent in 8 years out of the last 10 years and lost 90 per cent one year. Use Table 9.2. What was the...

Answered: 1 week ago

Question

★★★★★
Och SpA is considering a project that will result in initial after-tax cash savings of 3.5 million at the end of the first year, and these savings will grow at a rate of 5 per cent per year...

Answered: 1 week ago

Question

★★★★★
Why do bonds have indentures? What, in your opinion, is the most important indenture for a bond? Are indentures more or less important for junk bond issues? Explain.

Answered: 1 week ago

Question

★★★★★
Explain the statement, the terms prior and posterior, when applied to prob abilities, are relative terms, relative to a given sample. Is it possible for a set of probabilities to be both prior and...

Answered: 1 week ago

Question

★★★★★
14. Does the all-or-none law apply to dendrites? Why or why not?

Answered: 1 week ago

Question

★★★★★
5. Which chemicals cross the blood-brain barrier passively?

Answered: 1 week ago

Previous Question Next Question