Importance of correlation coefficient of securities

Assignment Help Finance Basics
Reference no: EM133074177

What is the importance of the correlation coefficient of the securities when you are choosing them to be included in a portfolio?

Provide two reasons and one example to substantiate your answer. Use your own words.

Reference no: EM133074177

Questions Cloud

Compute the net marketing contribution for delta line : ABC Inc. has served the American market for 3D Printers for almost a decade. The company recently launched its Delta line of 3D Printers positioned for designin
Determine the carter co break-even point in units : Last year, Carter sold 14,000 units of Arks and 56,000 units of Bins. Determine the Carter Co break-even point in units
Describe possible causes of the imbalance : Describe possible causes of the imbalance and Identify the signs and symptoms that Tony is exhibiting as a result of the acid-base imbalance
Coefficient of risk aversion considerations : You currently own a portfolio comprised of U.S. equities (90%) and gold (10%). The U.S. equity allocation is invested passively in the S&P 500 Index.
Importance of correlation coefficient of securities : What is the importance of the correlation coefficient of the securities when you are choosing them to be included in a portfolio?
Determining the net income : A Small Bank has the following Balance Sheet, rates earned on assets, and rates paid on its liabilities.
Estimate the value of the swap : Assume also that the continuously compounded risk-free rate observedfor the last 1.5 months is 2.7%. Estimate the value of the swap.
Methodology of System Engineering and AI : Apply system engineering and AI tools for modelling, simulation, design and development of engineering and AI systems
Find adequate funding from the financial institutions : The Saudi Arabia Vision 2030 stated SMEs (Small-Medium Size Enterprises) struggle to access adequate funding from the financial institutions.

Reviews

Write a Review

Finance Basics Questions & Answers

  Hedge fund manager incentive fee

If the risk-free interest rate is Rf and equals the fund's benchmark, the portfolio's net asset value is P, and the hedge fund manager incentive fee is 30% of profit beyond that, the incentive fee is equivalent to receiving ______ call(s) with exe..

  What is the meaning of the computed net present value figure

What is the meaning of the computed net present value figure? For the press brake project, at what annual rates of return do the net present value and internal rate of return methods assume that the net cash inflows are being reinvested?

  What is the fair price of this investment

If the discount rate is 11.25% compounding quarterly, what is the fair price of this investment?

  Calculate the values for the currency-todeposit ratio

Suppose that the ratio of total reserves to deposits changes from the value you calculated in part (a) to 2.0. (Assume that the currency-to-deposit ratio remains the same.) Now what is the value of the money multiplier?

  Calculate the reliability of the unit for a 150-hour mission

Field data have indicated that Unit A has a failure rate of 0.0004 failure per hour. Calculate the reliability of the unit for a 150-hour mission.

  What will be the put payoff

What will be the put's payoff, if at expiration the 180-day spot rate is 6.6%?

  Involvement of government in international trade

Why should or should not the government provide subsidies to help U.S. industries compete in the globalized world.

  Ordinary annuity for a comparable rate of? return

He promptly sold it for ?$99625. What annual interest rate would he need to earn on an ordinary annuity for a comparable rate of? return?

  What is the value of the bank stock

You are valuing a bank. The bank currently has assets of $350 per share. Five years from now (that is, at the end of five years), you expect their assets per sh

  Account at the end of that time period

How much money will be in the account at the end of that time period?

  International dimensions of organizational behavior

How might an understanding of the International Dimensions of organizational behavior help a manager make better and more ethical decisions?

  How long that amount will last

If the inflation rate average 3.5 percent during Bill's retirement, how old will he be when prices have doubled from current levels? How much will a soda cost when bill dies, i he lives the full 30 years and the soda costs $1 today?

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