Expected return and standard deviation of variance portfolio

Assignment Help Financial Management

Reference no: EM13809498

The stock of Bruin, Inc., has an expected return of 14 percent and a standard deviation of 42 percent. The stock of Wildcat Co. has an expected return of 12 percent and a standard deviation of 57 percent. The correlation between the two stocks is 0.25. Is it possible for there to be a minimum variance portfolio since the highest-return stock has the lowest standard deviation? If so, calculate the expected return and standard deviation of the minimum variance portfolio.

Reference no: EM13809498

Questions Cloud

Calculate the amount of interest paid over life of mortgage : You plan to purchase a $175,000 house using a 15 year mortgage obtained from a local bank. The mortgage rate offered to you is 7.75%. You will make a down payment of 20% of the purchase price. If the monthly payments of the mortgage are $1,317.79: Ca..

Discuss culture and its importance to anthropology : Discuss culture and its importance to anthropology

What is the effective yield to maturity : Assume a zero-coupon bond that sells for $717 will mature in 10 years at $1,700. What is the effective yield to maturity?

Difference between capital structure and capital budgeting : What is the difference between capital structure and capital budgeting? Explain and give an example of a capital structure decision and an example of a capital budgeting decision.

Expected return and standard deviation of variance portfolio : The stock of Bruin, Inc., has an expected return of 14 percent and a standard deviation of 42 percent. The stock of Wildcat Co. has an expected return of 12 percent and a standard deviation of 57 percent. calculate the expected return and standard de..

Mutual fund-the market index and the risk-free rate : Consider the following information for a mutual fund, the market index, and the risk-free rate. You also know that the return correlation between the fund and the market is .97. What are the Sharpe and Treynor ratios for the fund?

Why organizations important to continual learning : Why are professional organizations important to continual learning? What professional organizations benefit both the employee and the employer

What was the prevailing interest rate : What was the prevailing interest rate, using compound interest

Benefits and challenges of total quality management : What are the benefits and challenges of Total Quality Management (TQM) and International Organization for Standardization (ISO)? Write no more than 160 words.

User Account

All Pages