User Account

All Pages

Calculate the expected return of a portfolio

Assignment Help Financial Accounting
Reference no: EM132935657

Suppose the expected returns and standard deviations of Stocks A and B are E(RA) = 0.082, E(RB) = 0.142, σA = 0.352, and σB = 0.612. (Do not round intermediate calculations. Round the final answers to 2 decimal places.)

Problem a-1. Calculate the expected return of a portfolio that is composed of 27 percent A and 73 percent B when the correlation between the returns on A and B is 0.42.

Problem a-2. Calculate the standard deviation of a portfolio that is composed of 27 percent A and 73 percent B when the correlation between the returns on A and B is 0.42.

Problem b. Calculate the standard deviation of a portfolio with the same portfolio weights as in part (a) when the correlation coefficient between the returns on A and B is -0.42.

Reference no: EM132935657

Questions Cloud

Identifying coaches or mentors in the workplace : What should you consider when identifying coaches or mentors in the workplace? How can a coaching or mentorship initiative be most effective?
Draw up an estimation of working capital results of abc ltd : Draw up an estimation of working capital results of ABC Ltd using assumed figures for five years, showing all details right from Cost of production to Retained
Role of hr in employee engagement in organisations : How has evolved the role of HR in Employee Engagement in organisations today?
Why might employees not seek to unionize : Why might employees not seek to unionize, or reasons why a union might fail to unionize?
Calculate the expected return of a portfolio : Calculate the expected return of a portfolio that is composed of 27 percent A and 73 percent B when the correlation between the returns on A and B is 0.42.
Collective bargaining process impact negotiations : How does the history of unions and the collective bargaining process impact negotiations today and what are some of the current trends or problems in labor rela
Reward systems in the organization and employee performance : The gap between women's and men's pay is still considerable. What steps should employers and managers take in order to close this gap in a fair and consistent m
What expected return on portfolio composed of thirt percent : Security F has an expected return of 12.0 percent, What is the expected return on a portfolio composed of 30 percent of security F and 70 percent of security G?
Analyzing and understaning incident causation : Given our focus on analyzing and understaning incident causation, it is worth noting that some safety professionals now refuse to use the term incident.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine the selling price of the bonds

Question: As the controller of the company, determine the selling price of the bonds

  Which types of accounts will appear in the post-closing

Which types of accounts will appear in the post-closing trial balance? Which of the following is not part of the recording process?

  Identify three main categories of statement of cash flows

Identify the three main categories of the statement of cash flows including examples. Why do you think these categories were chosen

  Record the new asset from the exchange

Evaluate Chi s cost to record the new asset from the exchange - Chi Corporation trades an asset by a book value of $20,000 for another asset with a fair market value of $15,000.

  What is the present value of the investment

Amy will receive a lump sum payment of $87,500 and the property reverts to the lessee. At an interest rate of 5%, what is the present value of the investment?

  Estimate the expected return on the stock for a short-term

Estimate the expected return on the stock for a short-term investor in the company. In December 1995, Boise Cascade's stock had a beta of 0.95.

  Gross profit method-compute the cost of goods destroyed

Tim Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $38,000. Purchases since January 1 were $72,000; freight-in, $3,400; Compute the cost of goods destroyed. Compute the cost of goods des..

  Requisitioned by the production supervisor for production

Direct materials of $10,000 are requisitioned by the production supervisor for the production area. Job order costing is used. The journal entry to record this transaction is:

  Assume that direct labor is a variable cost

Harris Corporation produces a single product. Last year, Harris manufactured 29,010 units and sold 23,900 units. Production costs for the year were as follows: Assume that direct labor is a variable cost

  Illustrate what would ortiz report as total revenue

Illustrate what would Ortiz report as total revenue in a single-step income statement?

  What is the balance in account at the end of thirteen years

8 years in to the savings account, and the interest rate rises to 9% compounded semi-annually. What is the balance in the account at the end of 13 years?

  Prepare the plant assets section of sheffields balance sheet

At December 31, 2017, Sheffield Corporation reported the following plant assets. Land $ 3,798,000 Buildings $26,660,000 Less: Accumulated depreciation—buildings 15,097,050 11,562,950 Equipment 50,640,000 Less: prepare the plant assets section of Shef..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd