Determine the standard deviation of returns

Assignment Help Operation Management

Reference no: EM13956397

An investor plans to invest 75 percent of her funds in the common stock of GAmma Industries and 25 percent in Epsilon Company. The expected return on GAmma is 12 percent and the expected return on Epsilonis 16 percent. The Standard deviation of returns for Gamma is 8 percent and for Epsilon is 12 percent. The correlation between the returns for Gamma and Epsilon is +0.8. Determine the standard deviation of returns for this investor's portfolio

Reference no: EM13956397

Questions Cloud

Reduce the materials - labor and overhead cost : To achieve a 12 percent multifactor productivity improvement by reducing materials costs only, one needs to reduce the materials cost by____nothing percent.

Risk sharing versus success-sharing pay plans : Compare and contrast risk sharing versus success-sharing pay plans. Which plan would you prefer to be a participant in and why?

Are the events women and the foreign car owner inependent : Sixty percent of the employees in adepartment are women. One third of the women drive foreign cars. The rest drive domestic cars.

What is the investors required return : ATP Industries paid a $0.50 dividend to its common shareholders 6 years ago. It just paid a dividend of $0.67 to its common shareholders. If dividends continue to grow at this rate for the foreseeable future, and the shares are worth $10.05, what is ..

Determine the standard deviation of returns : An investor plans to invest 75 percent of her funds in the common stock of GAmma Industries and 25 percent in Epsilon Company. The expected return on GAmma is 12 percent and the expected return on Epsilonis 16 percent. The Standard deviation of retur..

Risk sharing versus success-sharing pay plans : Compare and contrast risk sharing versus success-sharing pay plans. Which plan would you prefer to be a participant in and why?

Determine the distance down the incline at the angle found : Plot the trajectory given by the angle found in a) from t = 0 until the projectile hits the incline with a thick red line for a particular choice of numerical parameters. Then combine this graph with a graph which is manipulated with Φ to graphica..

What is the future value of five-year ordinary annuity : What is the future value of a five-year ordinary annuity with annual payments of $200, evaluated at a 15 percent interest rate?

Variable rates are equally risky for the lender and borrower : Variable rate debt never should be used by healthcare organizations because it is too risky. Compared to fixed interest rates, variable rates are riskier for the borrower but less risky for the lender. Compared to fixed interest rates, variable rates..

User Account

All Pages