Standard deviation of the weekly returns on the portfolio

Assignment Help Financial Management
Reference no: EM131451940

Stocks 1 and 2 are selling for $100 and $125, respectively. You own 200 shares of stock 1 and 100 shares of stock 2. The weekly returns on these stocks have means of 0.001 and 0.0015, respectively, and standard devia- tions of 0.03 and 0.04, respectively. Their weekly returns have a correla- tion of 0.35. Find the correlation matrix of the weekly returns on the two stocks and the mean and standard deviation of the weekly returns on the portfolio.

Reference no: EM131451940

Questions Cloud

Orange prices and the variable costs change with inflation : Assuming that orange prices and the variable costs change with inflation, what is the value of the groves?
Find cash flow to debtholders and cash flow to equityholders : Find operating cash flow. Find cash flow to debtholders and cash flow to equityholders.
Should you go forward with the new advertising campaign : Should you go forward with the new advertising campaign? Why or Why Not? What is the NPV? What is the IRR?
Explicit cost of attending the training program : What is the present value of the explicit cost of attending the training program? What is the present value of implicit cost of attending the training program.
Standard deviation of the weekly returns on the portfolio : Find the correlation matrix of the weekly returns on the two stocks and the mean and standard deviation of the weekly returns on the portfolio.
What is the maximum growth rate possible : What dividend payout ratio is necessary to achieve this growth rate under these constraints? What is the maximum growth rate possible?
Which one is often called common size analysis : What is meant by the term horizontal analysis? What is meant by the term vertical analysis? Which one is often called “common size analysis”?
Pay to purchase one share of this stock : how much are you willing to pay to purchase one share of this stock today?
Company weighted average flotation cost is percent : Your company's weighted average flotation cost is percent. The true cost of building the new assembly line after taking flotation costs into account is

Reviews

Write a Review

Financial Management Questions & Answers

  Assume all sales revenue is received in cash

The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 34 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are ..

  What must be the return on equity ROE

Eastern Electric currently pays a dividend of about $1.76 per share and sells for $35 a share. a. If investors believe the growth rate of dividends is 2% per year, what is the opportunity cost of capital? b. If investors' opportunity cost of capital ..

  What is the probability that you are right in your decision

Sao Luís Corporation is an all equity firm with a total value of $22 million. It requires an additional capital of $7 million, which may be either equity, or debt at the interest rate of 7%. What is the preferred method of raising new capital, if the..

  Calculate earnings per share in each state of the economy

Assume no taxes no bankruptcy costs. Company U has no debt outstanding and the market value is $200000. Earnings before interest and taxes (EBIT) are expected to be $25000 if economic conditions are normal and $40000 if expansion occurs. Calculate Ea..

  Period cash payment-discount on bonds payable

On December 31, 2013, Drew Company issued $350,000, 5-year bonds for $320,000. The stated rate of interest was 7% and interest is paid annually on December 31. Period Cash Payment (Credit) Interest Expense (Debit) Discount on Bonds Payable

  What is the discounted payback period for each project

Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$ 350,000 –$ 50,000 1 45,000 24,000 2 65,000 22,000 3 65,000 19,500 4 440,000 14,600 Whichever project you choose, if any, you require a 15 percent return on ..

  Compounded continuously compared to monthly

You make monthly deposits of $310 into an account that pays 3% per year. How much larger would the balance be after 5 years if interest is compounded continuous

  What is the firm market value capital structure

Hankins Corporation has 8.9 million shares of common stock outstanding, 640,000 shares of 7.4 percent preferred stock outstanding, and 189,000 of 8.6 percent semiannual bonds outstanding, par value $1,000 each. What is the firm's market value capital..

  The return on an average stock in the market last year

Booher Book Stores has a beta of 1.2. The yield on a 3-month T-bill is 3.5% and the yield on a 10-year T-bond is 6%. The market risk premium is 5%, and the return on an average stock in the market last year was 15%. What is the estimated cost of comm..

  Two different investments

You’re trying to choose between two different investments, both of which have up-front costs of $100,000. Investment G returns $165,000 in 9 years. Investment H returns $285,000 in 16 years.

  Find financial ratios for the microsoft corp

Find financial ratios for the Microsoft Corp for the last 1-3 years and its major competitor (Apple) for the last year in the Internet.

  Based on the company own trailing pe-the stock is worth

The 5-year average trailing P/E of a stock is 18x. The last year EPS was $4.25 and the estimated EPS for the next year is $4.50. Company also paid a dividend of $3.00 last year and is expected to pay a dividend of 3.10 next year. Based on the company..

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