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Suppose you purchased $1,000 of Stock A with your own money. You then borrowed $500 and used this money to buy Stock B. This means that the portfolio weights are as follows: wA = 1000/1000 = 1.00; wB = 500/1000 = 0.50; wC = -500/1000 = - 0.50. The correlation coefficient between A and B is 0.70; interest rate on the risk-free asset (Security C) is 5%; variance of Stock A is 0.25; variance of Stock B is 0.49; expected return on Stock A is 10% and Stock B is 16%. Calculate the expected return of the portfolio comprising securities A, B, C.
a. 13.5% b. 14.5% c. 15.5% d. None of the above
Calculate the variance of a portfolio of the three securities.
a. 0.6175 b. 0.7858 c. 0.5168 d. None of the above
What is the beta of your portfolio
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using the wall street journal or barrons find the bond yields for treasury securities with the following
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