User Account

All Pages

Calculate the expected return on ben portfolio

Assignment Help Finance Basics
Reference no: EM132660344

There are three assets A, B and C. The returns for shares A, B and C over the next year have expected values 9%, 6%, 5% respectively. The standard deviations for A, B and C are 30%, 25% and 20% respectively. The covariance between these A and B is 0.0375, the covariance between A and C is -0.018, the covariance between B and C is -0.03. Ben currently has invested 40%, 40%, 20% in shares A, B and C respectively.

a) Calculate the expected return on Ben's portfolio. Show full working.

b) Calculate the correlations AB, AC, BC. Show full working.

c) Calculate the variance and standard deviation of the return on Ben's portfolio. Show full working.

d) Alice also wants to invest in shares A, B and C, but her risk appetite is higher than Ben. Suggest a weight allocation such that Alice's portfolio will have a higher risk than Ben's portfolio, and explain why. You are NOT required to provide calculations.

Reference no: EM132660344

Questions Cloud

Define a real option : What is the difference between a loss arising from the unavailability of a website and the lost profits that are incurred when that website is disabled?
What is the investment worth to you today : If the interest rate is 8.47% and interest in compounded anually, then what is the investment worth to you today?
What is the present value of the installment payments : Assuming that the interest rate on the installment contract is 5%, what is the present value of the installment payments
Why are new employees more susceptible to influence : Why are new employees more ‘susceptible to influence'. How did the managers rationalize taking company inventory for personal use?
Calculate the expected return on ben portfolio : a) Calculate the expected return on Ben's portfolio. Show full working.
What was the tax status of this property for Tan : What was the tax status of this property for Tan? What is the nature of the recognized gain or loss from the distribution of the property
Determine the tapdance wacc : What will be TapDance's WACC? (Round your answer to 2 decimal places.)
What are the tax status of the property to the corporation : What are the tax status of the property to the corporation and the nature of the recognized gain or loss when the corporation sells the property
Forecasting the needs for capital budgets : What are successful approaches to forecasting the needs for capital budgets? Is it ethical for agencies to utilize social media to bolster a capital funding pro

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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