Expected return of the minimum variance portfolio

Assignment Help Biology
Reference no: EM132696344

The following table contains information regarding stock returns of IBM and Google. IBM) Expected return is 10% and standard deviation is 20% Google) Expected return is 15% and standard deviation is 30%

In addition, you find the return correlation between IBM and Google is 0.2. The risk free rate is 5%.

a) What is the expected return of the minimum variance portfolio (MVP) constructed from the two stocks?

b) Consider a portfolio that invests equally in the two stocks (IBM and Google), what is the Sharpe ratio of this equally weighted portfolio?

c) What is the standard deviation of the optimal risky portfolio (a.k.a. tangency portfolio) constructed from the two stocks?

Reference no: EM132696344

Questions Cloud

Describe three limitations to effective monetary policy : Who was John Maynard Keynes? Identify and explain four key points about his economic ideas that are directly relevant to the concepts that we have covered.
How do discuss capital structure : Discuss capital structure.Since debt is typically tax deductible, in addition to having a lower cost of capital, there is a benefit to having some debt.
Industry experts believe blockchain is technology : Industry experts believe blockchain is a technology that has the potential to affect the business of most IT professionals in the next five years.
Identify the state or region in which you currently reside : In the Final Project for this course, you will demonstrate your understanding of-as well as apply and critically evaluate-the major concepts presented in this.
Expected return of the minimum variance portfolio : The following table contains information regarding stock returns of IBM and Google. IBM) Expected return is 10% and standard deviation is 20% Google)
Calculate the principal repayment and cost of loans : Calculate the principal repayment and cost of loans for the first-year loan Period? What are the financial markets in Ethiopian
What is the yield to? maturity : Nico Corp issued bonds bearing a coupon rate of 12? percent, pay coupons? semiannually, have 3 years remaining to? maturity, and are currently priced at? $940 p
How much is the interest income on plan assets : How much is the interest income on plan assets? Discount rate based on high quality corporate bonds 5% Information regarding the defined benefit plan as of Dec
Establishing current state to get to desired state : Assessing risk begins with baselining, establishing a current state to get to the desired state.

Reviews

Write a Review

Biology Questions & Answers

  Immune response to infectious disease

It is a very curcial concept to understand how the immune response is mounted against viruses, bacteria, protozoans and helminthes. For an effective immune response, both innate and adaptive immunity should work together.

  A review on advanced glycated end products (ages)

This Project report elaborates a critical review of important elements attached to Advanced Glycated End Products (AGEs). It is very crucial to understand the process called Millard reaction.

  Plastic as a soil stabilizer

Soil stabilization is the permanent physical and chemical alteration of soils to enhance their physical properties. Stabilization can increase the shear strength of a soil and control the shrink-swell properties.

  Principles of microbiology

This assignment has three parts which contains questions related to Microbiology. It contains basic principles of microscopy, staining techniques in microbiology and microbial growth in the food industry.

  List the biologic functions

Lipid metabolites are often seen as key elements in cellular signaling. Is this unique? Please provide several examples of the function of lipids as key elements in signal arrays and list the biologic functions these signals affect?

  Biologic function relationships

Please describe how one might search for chemical structure, biologic function relationships, involving small molecular weight lipophylic compounds. Provide one example.

  Case study on patient in the haematology laboratory

Write a case study which detailing a scenario of a patient being investigated in the Haematology laboratory.

  Use of pcr and genetic approaches in biotechnology

The use of PCR and genetic approaches in biotechnology

  Describe the role of this enzyme in honey

Glucose oxidase is an enzyme that can be used for measurements of glucose levels by combining this reaction with an oxygen probe.

  Genetic problems

What phenotypic ratio would you get if you crossed a white mouse and a heterozygous brown mouse?

  Prepare an essay on nosocomial infection

Prepare an essay on nosocomial infection.

  Monitoring and recording the blood pressure

To increase the awareness of monitoring and recording the blood pressure of patients and practice measuring blood pressure in a safe environment.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd