Expected return and the standard deviation of security

Assignment Help Financial Management

Reference no: EM131620330

Here are the expected returns on two stocks: Returns Outcome Probability X Y 1 0.2 15% 7% 2 0.6 10% 12% 3 0.2 5% 17% A. What is the expected return and the standard deviation of Security X? B. What is the expected return and the standard deviation of Security Y? C. What is the expected return and the standard deviation of a portfolio consisting of 50% Security X and 50% Security Y? D. What is the correlation between Security X and Security Y? (Note: If you do the calculations in Parts A to C correctly, you do not have to do any calculations in Part D).

Reference no: EM131620330

Questions Cloud

What is price of the call option : The risk-free rate is 5 percent per year, compounded continuously. If the exercise price is $0, what is the price of the call option?

Calculate gross proceeds per share : Howett Pockett, Inc., plans to issue 10.4 million new shares of its stock. Calculate the gross proceeds per share.

What was an investor effective annual return : What was an investor’s effective annual return over this two year period?

Calculate the net proceeds to renee from the sale of debt : Renee’s Boutique, Inc., needs to raise $58.17 million to finance firm expansion. Calculate the net proceeds to Renee’s from the sale of the debt.

Expected return and the standard deviation of security : What is the expected return and the standard deviation of Security Y?

What range of discount rates should company accept project : A three-year project requires an initial investment of $500,000, Over what range of discount rates should the company accept the project?

Calculate the price of the stocks : Calculate the price of the following stocks. The required return is 8%. A. Stock A is expected to pay a dividend of $4.50 next year

What are? facebook net cash flow under the lease? contract : Facebook is considering two proposals to overhaul its network infrastructure. what are? Facebook's net cash flow under the lease? contract?

Which payment system helps the patient the most : Which payment system helps the patient the most?

User Account

All Pages