Reference no: EM1350361
Expected return
Year Stock L Stock M
2010 14% 20%
2011 14 18
2012 16 16
2013 17 14
2014 17 12
2015 19 10
Portfolio return and standard deviation Jamie Wong is considering building an investment portfolio containing two stocks, L and M. Stock L will represent 40% of the dollar value of the portfolio, and stock M will account for the other 60%. The expected returns over the next 6 years, 2010 2015, for each of these stocks are shown in the following table:
a. Calculate the expected portfolio return, rp, for each of the 6 years.
b. Calculate the expected value of portfolio returns, , over the 6-year period.
c. Calculate the standard deviation of expected portfolio returns, rp, over the
6-year period.
d. How would you characterize the correlation of returns of the two stocks L and M?
e. Discuss any benefits of diversification achieved by Jamie through creation of the portfolio.
|
Explain these factors provide the underlying basis
: Explain These factors provide the underlying basis for a strategic plan because a firm strives to take advantage of strenghts, improve weaknesses, avoid threats and capitalize on opportunties.
|
|
Show organizational management categories
: Help a creating an organizational recommendation based on these categories/areas:
|
|
How stress can be avoided
: Find 3 web sites relating to "Stress". Read the articles on the sites and prepare a summary in Word of your findings and how you think stress can be avoided. Include the addresses of the web sites you found in your paper.
|
|
Explain how and why has corporate downsizing
: Explain how and why has corporate downsizing been effected in the last 18-months? Why have so many employees been laid off? What are some of the statistics of lay-off/corporate downsizing?
|
|
Calculate the expected portfolio return
: Jamie Wong is planning building an investment portfolio containing two stocks, L and M. Stock L will represent 40 percent of the dollar value of the portfolio
|
|
Determine the average force that the water exerts on diver
: In a chase scene, a movie stuntman is supposed to run right off flat roof of one city building and land on another roof 1.7m lower. If the gap between the buildings is 4.4m wide, how fast must he run.
|
|
Cost of capital questions-two aftertax cost of debt
: Why do we use the overall cost of capital for investment decisions even when only one source of capital will be used?
|
|
Clinical and cultural factors of professional codes of ethic
: When thinking of clinical and cultural factors of professional codes of ethics, agency and employer policies, federal, state, local statues, rules and regulations and case laws, what is a scenario in which ethical principles/codes and/or laws migh..
|
|
Explaining smartphones as important digital devices
: Many resources will suggest that in the next few coming years, smartphones will become the one of the most important digital devices we own. Explain the implications of this statement.
|