Solution-Problem regarding the portfolio valuation

Problem regarding the portfolio valuation

Assignment Help Finance Basics

Reference no: EM131086398

Question 1: Portfolio valuation

Consider shares in two companies, JAY and KAY, as follows:

	Expected Return E(R)	Standard Deviation s	Correlation Coefficient r
Share JAY	12%	18%	- 0.3
Share KAY	24%	32%

a) Calculate the covariance between Share JAY and KAY returns.

b) What is the expected return and standard deviation of returns on a portfolio comprising 35% in Share JAY and 65% in Share KAY?

c) If you wanted to create a portfolio consisting only of these two shares, how much would you need to invest (weights) in each share so that your portfolio return would be equal to 15.6%? Note: do not round.

d) Using the weights calculated in part c), calculate the variance and standard deviation of your portfolio.

Reference no: EM131086398

Questions Cloud

Required return on the company stock : Siblings, Inc., is expected to maintain a constant 6.6 percent growth rate in its dividends, indefinitely. The company has a dividend yield of 8.4 percent. What is the required return on the company's stock?

Which aligns with a basic idea in cross-cultural psychiatry : Watters presents a theory in which the spread of the modern Western approach to mental illness has which effect?

What is the required return : What is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Display the value on eight leds of the demo board : display the value on eight LEDs of the demo board.

Problem regarding the portfolio valuation : Calculate the covariance between Share JAY and KAY returns. What is the expected return and standard deviation of returns on a portfolio comprising 35% in Share JAY and 65% in Share KAY?

Write a function that performs a block read from the 24lc08b : Write a function that performs a block read from the 24LC08B.

What is the 7-bit address of this device : What is the 7-bit address of this device

Explain the differences between ifrs and gaap : International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB). Explain the differences between IFRS and GAAP.

What was the title of r. d. laing autobiographical account : According to Zimmermann, the method of __________ demanded that the patient's behavior and experience be considered within their social context.

User Account

All Pages

Problem regarding the portfolio valuation

Reference no: EM131086398

Reference no: EM131086398

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT