Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your portfolio consists of two securities: Transcomm and MidCap. The expected return for Transcomm is 15.9 percent, while for Mid Cap it is 5.9 percent.

image text in transcribed

Your portfolio consists of two securities: Transcomm and MidCap. The expected return for Transcomm is 15.9 percent, while for Mid Cap it is 5.9 percent. The standard deviation is 6.9 percent for Transcomm and 20.9 percent for MidCap. Assume 45 percent of the portfolio is invested in Transcomm. Calculate the portfolio standard deviation if the correlation between the stocks is 0.80. (Round intermediate calculations to 6 decimal places, e.g. 0.251254 and the final answer to 2 decimal places, e.g. 15.25%.) Portfolio standard deviation % Calculate the portfolio standard deviation if the correlation between the stocks is -0.80.(Round intermediate calculations to 6 decimal places, e.g. 0.251254 and the final answer to 2 decimal places, e.g. 15.25%.) Portfolio standard deviation %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

College Accounting A Contemporary Approach

Authors: David Haddock, John Price, Michael Farina

4th edition

978-1259995057, 1259995054, 978-0077503987, 77503988, 978-0077639730

Students also viewed these Finance questions