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

Question

1 Approved Answer

You invest 40% of your money in Stock A and the rest in Stock B. The standard deviation of annual returns is 36% for Stock

You invest 40% of your money in Stock A and the rest in Stock B. The standard deviation of annual returns is 36% for Stock A and 41% for Stock B. The covariance between the two stocks is 0.02. What is the standard deviation of annual returns for the combination of the two stocks?

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_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

Foundations Of Financial Management

Foundations Of Financial Management

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen

18th Edition

126409762X, 9781264097623

More Books

Students also viewed these Finance questions

Question

★★★★★
What is a millage rate? How is it determined?

Answered: 1 week ago

Question

★★★★★
You have just been hired as a financial manager for BEE Inc. Management has provided you with the information below and has asked you to provide a brief explanation for each of the following...

Answered: 1 week ago

Question

★★★★★
3. Put a rotating monitor in charge of equipment or materials.

Answered: 1 week ago

Question

★★★★★
How are the six steps in the data-driven approach to fraud detection different from the traditional reactive approach?

Answered: 1 week ago

Question

★★★★★
Carlsbad Corporation's sales are expected to increase from $ 5 million in 2 0 2 1 to $ 6 million in 2 0 2 2 , or by 2 0 % . Its assets totaled $ 4 million at the end of 2 0 2 1 . Carlsbad is at full...

Answered: 1 week ago

Question

★★★★★
Draw Graphs and show your calculations in answering these questions. Answer each question with sentences. The demand for labor in Tucson is characterized by the following equation: W = 12 q/100,000,...

Answered: 1 week ago

Question

★★★★★
Payal has just accepted a three year assignment to run the overseas division of her organization. Before she transfer, Payal and her family are required to take several classes on culture, housing,...

Answered: 1 week ago

Question

★★★★★
An automobile manufacturer uses about 6,000 pairs ofbumpers (front bumper and rear bumper) permonth, which it orders from asupplier. The bumpers are used at a reasonably steady rate during the 240...

Answered: 1 week ago

Question

★★★★★
You are a Manager at Hotel. You have recently hired a new Front Desk Agent, Tina. Tina is enthusiastic and an extrovert. She shows high levels of motivation when learning new tasks. She is quickly...

Answered: 1 week ago

Question

★★★★★
1.Liverpool corporation which manufactures appliances for other companies made sales of $200000000 subject to the product warranties. In the past years between 4% and 6% of the products provided...

Answered: 1 week ago

Question

★★★★★
Exit strategy recommendations and plan: Outline your change management strategy for transition after the acquisition. Specifically, you must address the following criteria: Change management...

Answered: 1 week ago

Question

★★★★★
3. Behavior. Ask whether the trainees on-the-job behavior changed because of the training program. For example, are employees in the stores complaint department more courteous toward disgruntled...

Answered: 1 week ago

Question

★★★★★
1. A well-thought-out orientation program is essential for all new employees, whether they have experience or not.

Answered: 1 week ago

Question

★★★★★
2. Learning. Test the trainees to determine whether they learned the principles, skills, and facts they were supposed to learn.

Answered: 1 week ago

Previous Question Next Question