Beta coefficient of standard deviation

Assignment Help Financial Management

Reference no: EM131894007

Stock X has an 11 percent expected return, a beta coefficient of 0.9 and a 30 percent standard deviation. Stock Y has a 13 percent expected return, a beta coefficient of 1.2 and a 30 percent standard deviation. If the returns on stock X and Y are positively correlated (that is, the correlation coefficient is between 0 and 1), would you expect the standard deviation of a portfolio consisted of equally weighted stock X and Y to be less than 30 percent, equal to 30 percent, or greater than 30%? Why? Explain and be concise.

Reference no: EM131894007

Questions Cloud

Views on chemical warfare : What was Captain Alfred T. Mahan stands on chemical warfare, and which persuasive rhetoric he use to display his views on chemical warfare?

Briefly describe the company and its product : Briefly describe the company and its product and the ethical dilemma associated with the production and distribution of its products.

Discuss how the humanistic theorists might respond : Discuss how the humanistic theorists might respond to this question from a potential client - Can you help me, or should I stay with Dr. Smith

Fries view on chemical warfare : What was Major Gen. Amos A. Fries's view on chemical warfare, and what persuasive rhetoric did he use to display his views?

Beta coefficient of standard deviation : Stock X has an 11 percent expected return, a beta coefficient of 0.9 and a 30 percent standard deviation.

Research the committees of the house : What kind of constituent service would you be likely to do? What kind of "home style" would you create (and how?)

Discuss the political changes in the us : Discuss the political changes in the U. S. from 1820-1840. Were the changes positive or negative? Explain

What is the total cost per batch : Tasty Beverage Co. produces soft drinks, specializing in fruit drinks. They produce 5,000 cans of product per batch. Setup cost for each batch is $50.

Calculate the monthly payments of the mortgage : Calculate the monthly payments of the mortgage. Calculate the amortized fees and expenses of the mortgage.

User Account

All Pages