Determine the standard deviation of a portfolio

Assignment Help Finance Basics

Reference no: EM1365023

1) Consider two securities, A and B, with standard deviations of 30% and 40%, respectively. Calculate the standard deviation of a portfolio weighted equally between the two securities if their correlation is:

1. 0.9
2. 0.0
3. -0.9

2) Jean Smith owns a portfolio composed of three securities with the following characteristics:

Security Beta Standard Deviation Random Error Term Proportion
A 1.20 5% 0.30
B 1.05 8% 0.50
C 0.90 2% 0.20

If the standard deviation of the market index is 18%, what is the total risk of Jean's portfolio?

Reference no: EM1365023

Questions Cloud

Community and organizational leaders : Specific strategies community and organizational leaders can use to ensure needs are met.

What type of project organization would you recommend : You have been assigned as a project manager for a large, important project for your organization. You will need to form a cross functional team to complete this project. What type of project organization would you recommend for this project?

Find the charge on the drop : A 9300 kg boxcar traveling at 20m/s strikes a second boxcar at rest. The two stick together and move off with a speed of 10 m/s. What is the mass of the second car.

Individual strengths and problem-solving techniques : Describe a group setting or scenario in which you have worked or of which you are currently a part and what are the strengths and skills that you have brought to this group setting? How have they benefited the group?

Determine the standard deviation of a portfolio : Suppose two securities, A and B, with standard deviations of 30 percent and 40 percent, respectively. Determine the standard deviation of a portfolio weighted equally between two securities,

What are areas addressed in cbk : What are the areas addressed in the CBK? Was policy explicitly listed? If not, where do you feel it is addressed in the CBK?

Role of leadership in managing quality initiatives : Use three scholarly research articles on the role of leadership in managing quality initiatives in healthcare. Use articles that demonstrate three different styles of leadership, e.g. servant, transformational, transactional, etc.

What is an average force on the child : why is it advisable to make use of a proper restraining seat rather than hold a child on your lap.

Find the rfc which defines ftp protocol : Find the RFC that defines the FTP protocol. Take any non text file (e.g. word document, mpg, excel or any application centric file) Segmentation of a file and forming FTP datagrams: Read first 'x' number of bytes and use them as part of payload sect..

User Account

All Pages