User Account

All Pages

What is the expected return and standard deviation

Assignment Help Business Management
Reference no: EM132789572

1. Given the following information about Stocks A and B:σAAσBBCorr(A,B) = -0.5

=.10                                               E(R)=.12

=.05                                                E(R)=.07

a. Calculate what weights of stock A and B will be necessary to achieve the minimum variance portfolio (a portfolio comprised of only stocks A and B).

(Hint: Please refer to the textbook (Chapter 7, Example 7.2 Optimal Risky Portfolio)

b. What is the expected return and standard deviation of the minimum variance portfolio that you calculated in part (a) above?

2. Given the following two stock portfolio, with 40% invested in Stock A and 60% invested in Stock B:

State of Economy Probability Stock A (30%) Stock B (70%)

Good .25 25% 10%

Fair .50 10% 5%

Poor .25 5% 0%

Expected return

Standard deviation

CV

a. Calculate the expected return and standard deviation for Stock A and Stock B, respectively.

b. Calculate the Coefficient of Variation for Stock A and Stock B, respectively.

c. Calculate the Pearson correlation coefficient between Stock A and Stock B. What are the upper and lower bounds for the correlation coefficient?

d. Calculate the expected return of the portfolio.

e. Calculate the expected standard deviation of the portfolio.

Reference no: EM132789572

Questions Cloud

What edgar detoya should report accrued liabilities of : What Edgar Detoya should report accrued liabilities of? Edgar Detoya Law must determine the Dec. 31, 2019 year-end accruals for advertising
Discuss about the availability of support staff in the event : Contoso General is a US based hospital with its datacenter located in Chicago. They are concerned about the availability of support staff in the event.
What was the amount of supplies expense : A count of supplies on hand at the end of 2019 found an inventory of P875. What was the amount of supplies expense for 2019?
Evaluate lenscrafters operations strategy : Evaluate LensCrafters' operations strategy and explain how the organization seeks to gain a competitive advantage in terms of sustainability.
What is the expected return and standard deviation : b. What is the expected return and standard deviation of the minimum variance portfolio that you calculated in part (a) above?
Discuss about the background and problem statement : Write a condensed (2.5 - 3 pages or more is fine) for your mock dissertation topic. Overview (1-2 well developed paragraphs). Background and problem statement.
What was the total amount of insurance premiums paid : Under Maurice Sabio Vintage Clothing Services accounting system, What was the total amount of insurance premiums paid by Maurice Sabio during 2019?
What amount should therese report in income statement : Based on 2019 sales of music recorded by an artist, What amount should Therese report in its 2019 income statement as royalty expense?
Explain difference between physical order and logical order : Discuss the issues involved in sorting large data files. Explain how indexing is used to overcome this issue. Explain the difference between physical order.

Reviews

Write a Review

Business Management Questions & Answers

  What products or services do you offer

Introduce your company. Briefly provide company background information, how long you've been in business, and any accomplishments or successes.

  Identify and discuss five items that every e-business

Identify and discuss five items that every e-business should consider for improving the effectiveness and usability of their company's website.

  Describing the evolution of business

Create a 10- to 15-slide Microsoft® PowerPoint® presentation describing the evolution of business.

  Increase the rate of economic growth

List two examples of things that are likely to increase the rate of economic growth.

  Aspirations in contemporary western society

Are these meaningful aspirations in contemporary Western society? Why or why not?

  Determining the variable overhead costs

The firm allocates only variable overhead costs to each product based on direct labor hours. What is the contribution margin for each product? Which product or products should the company produce if it wants to maximize the contribution margin for..

  Brand and model of the motherboard

1. What is the brand and model of the motherboard? 2. What chipset does this board use? 3. What troubleshooting utilities are found on the CD that came bundled with the board?

  Beliefs about leadership

1. How valid are each of these beliefs about leadership? What is their source?

  Explain the new roles expected of the hti executives

Explain the new roles expected of the HTI executives using visionary and exemplary leadership as a way to achieve change in the organization.

  What is the significance of a cross over chart

What is the significance of a cross over chart related to process strategy?

  What is technology transfer

1. What is technology transfer? 2. What is the difference between Basic, Product and Engineering R&D?

  What are examples of variables that you might want to check

What are some examples of variables that you might want to check using the chi-square tests? What would these results tell you?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd