Weight of each stock in the minimum variance portfolio

Assignment Help Financial Management

Reference no: EM13917547

Consider two stocks, Stock D, with an expected return of 17 percent and a standard deviation of 32 percent, and Stock I, an international company, with an expected return of 10 percent and a standard deviation of 20 percent. The correlation between the two stocks is –.18. What is the weight of each stock in the minimum variance portfolio?

Reference no: EM13917547

Questions Cloud

After-tax percentage cost of capital : Britton Industries has operating income for the year of $3,500,000 and a 38% tax rate. Its total invested capital is $18,000,000 and its after-tax percentage cost of capital is 6%. What is the firm’s EVA?

What is the expected return of portfolio invested : Stock A has an expected return of i4% and a standard deviation of 35%. Stock B has an expected return of 20% and a standard deviation of 65%. The correlation coefficient between Stocks A and B is 0.2. What is the expected return of a portfolio invest..

Remodeling and expansion project : Home Place Hotels, INC. is entering into a 3-year remodeling and expansion project. The construction will have a limiting effect on earnings during that time, but when it is complete, it should allow the company to enjoy much improved growth in earni..

What is its times-interest-earned ratio : Graser Trucking has $10 billion in assets, and its tax rate is 30%. Its basic earning power (BEP) ratio is 20%, and its return on assets (ROA) is 6%. What is its times-interest-earned (TIE) ratio? Round your answer to two decimal places

Weight of each stock in the minimum variance portfolio : Consider two stocks, Stock D, with an expected return of 17 percent and a standard deviation of 32 percent, and Stock I, an international company, with an expected return of 10 percent and a standard deviation of 20 percent. The correlation between t..

Most recent financial statements : In its most recent financial statements, Newhouse Inc. reported $60 million of net income and $1,020 million of retained earnings. The previous retained earnings were $969 million. How much in dividends were paid to shareholders during the year? Assu..

Calculate the cost of common stock-after-tax cost of debt : Lang Enterprises is interested in measuring its overall cost of capital. Current investigation has gathered the following data. The firm is in the 40% tax bracket. The firm can raise debt by selling $1,000 par value, 8% coupon interest rate, 20 year ..

What will be the realized compound yield to maturity : A 2-year bond with par value $1,000 making annual coupon payments of $80 is priced at $980. What is the yield to maturity of the bond? What will be the realized compound yield to maturity if the one-year interest rate next year turns out to be 8%.

What was the stocks return for the missing year : You find a certain stock that had returns of 14.4 percent, –22.2 percent, 28.2 percent, and 19.2 percent for four of the last five years. Assume the average return of the stock over this period was 12.40 percent. What was the stock’s return for the m..

User Account

All Pages