What are expected return and standard deviation of returns

Assignment Help Financial Accounting
Reference no: EM132994722

Portfolio risk and return. Ebenezer Scrooge has invested 60% of his money in share A and the remainder in share B. He assesses their prospects as follows:

                                                                project

                                                             A                            B
Expected Return (%)                    15                      20
Standard Deviation (%)                  20                      22
Correlation between returns 0.5 for both projects
Invested Money                              0.6                     0.4

Problem A. What are the expected return and standard deviation of returns on his portfolio?

Problem B. How would your answer change if the correlation coefficient were 0 and -5.

Reference no: EM132994722

Questions Cloud

Calculate the carrying amounts of the assets at december : Prepare journal entries to record a. the $500,000 purchase b. depreciation and amortization expense for 2018 c. the change in the value of the computer software
What are the forecasted collections on accounts receivable : What are the forecasted collections on accounts receivable in March? J. Bieber Health System (JBHS) has forecast net patient revenue in the first 3 months
What is the amount of total assets at the end of the year : If total assets decreased $ 96,000 and owner's equity increased $ 83,000 during the year, what is the amount of total liabilities at the end of the year?
Analysis paper about the relationship between language : Write a 2-3 page (double-spaced) analysis paper about the relationship between language, diversity, and culture, based on your analysis of the proverbs and folk
What are expected return and standard deviation of returns : Ebenezer Scrooge has invested 60% of his money. What are the expected return and standard deviation of returns on his portfolio?
Calculate the bonds expected rate of return : Calculate the bonds expected rate of return. An issue of bonds with pa of $1,000 matures in 8 years and pays 7% p.a. interest semi-annually.
Journalize the transactions of february for lava lake inc : On August 22, Lava Lake Inc. sold 1,800 shares at $60 per share. Journalize the transactions of February 11, April 30, and August 22.
Create an income statement for the year ending december : The information relates to Sheridan Co. for the year 2022. After analyzing the data, prepare an income statement for the year ending December 31, 2022.
Will the junior creditors agree to the offer : Will the company's management be willing to offer this offer (assuming that they maximize shareholder value)? Will the junior creditors agree to this offer?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Questionbig screen corporation manufactures as well as

questionbig screen corporation manufactures as well as sells 50-inch televisionbig screen corporation manufactures as

  Calculate the employer payroll taxes

According to a summary of the payroll of Bailik Co., $880,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $40,000 was subject to state and federal unemployment taxes. Calculate the employer's payroll taxes, using the ..

  What are incremental free cash flows for cameron industries

The machine is expected to raise gross profits by $4,500,000 per year, What are the incremental free cash flows associated with the new machine in year 2?

  What is the operating profit margin

If the company does not maintain TIE ratio of at least 4 times, its bank refuse to renew its loan, and bankruptcy will result. What is Operating Profit Margin

  Distribution of income or loss to partnersjane invested

distribution of income or loss to partners.jane invested 100000 and paul invested 90000 in a new partnership. they

  What is the company free cash flow for the year

The company's operating income for the year is $245.80 million, What is the company's free cash flow for the year if its tax rate is 25%?

  What month will you make your last payment

The last payment is on month 48. Build the amortization table. What month will you make your last payment? How much will the last payment be

  Accrual of employees portion of pension plan

Accrual of employees portion of pension plan journal entry includes

  What loss on realization was

What Loss on realization was? Partners John and George who have been dividing profits and losses in the ratio of 3:2, respectively, decided to liquidate.

  What is the lowest possible per shovel price

This investment will be recovered at the end of the third year. Merton Shovel has a 35 percent marginal tax rate and a 15 percent required rate of return

  Provide all journal entries that are necessary

Provide all journal entries that are necessary in the books of Large Mart to record the inception of the lease for the car, the lease payments made

  What were delberts gross earnings this week

Delberts total sales for this week were $6,700. What were Delberts gross earnings this week under the new arrangement of 10% of all sales

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