What is the portfolio standard deviation

Assignment Help Financial Management
Reference no: EM131318014

Imagine you have a portfolio consisting of 30% IBM stock which has an expected return of 8% and a standard deviation of 42%. The remaining 70% of the portfolio is invested in Toyota stock which has an expected return of 5% and a standard deviation of 27%. The correlation between these two stocks is 0.65. What is the portfolio's standard deviation?

Reference no: EM131318014

Questions Cloud

What is the company operating leverage : Smith's Dairy Products reported sales of $1.5 million in 2012 and $2.25 million in 2013. The firm's EBIT was $550,000 in 2012 and rose to $925,000 in 2013. What is the company's operating leverage?
Current yield of bond : The 8%, $1,000 face value bond of Glenmore Foods is currently selling at $1,027. The bond has 16 years left to maturity. What is the current yield (also known as coupon yield) of this bond?
Evaluate the organization development plans : BSBMGT615 Contribute to Organization Development - Discuss how the use of survey are able to support the organization in terms of measuring and understanding the impact of a given organizational development programs or activities
Compare and contrast the role of erp systems : Compare and contrast the role of supply chain ERP systems and advanced planning and scheduling systems in enhancing firm and supply chain competitiveness.
What is the portfolio standard deviation : The remaining 70% of the portfolio is invested in Toyota stock which has an expected return of 5% and a standard deviation of 27%. The correlation between these two stocks is 0.65. What is the portfolio's standard deviation?
Evaluate judy stokley level of success in developing culture : Evaluate Judy Stokley's level of success in developing a culture of trust while implementing her drawdown plan as Eglin Air Base's new Advanced Medium Range Air-to-Air Missile (AMRAAM) program director.
What is the current value of the company : Cavo Corporation expects an EBIT of $29,550 every year forever. The company currently has no debt, and its cost of equity is 11 percent. The corporate tax rate is 35 percent What is the current value of the company?
Contrast exportlimport operations to local presence : Compare and contrast exportlimport operations to local presence. What are the logistics ramifications of each stage of international development?
Purchase a 10-year certificate of deposit : Suppose you have $2,000 and plan to purchase a 10-year certificate of deposit (CD) that pays 7% interest, compounded annually. How much will you have when the CD matures?

Reviews

Write a Review

Financial Management Questions & Answers

  Conduct a top down analysis of overall economic environment

Conduct a Top Down analysis of the overall economic environment and consider how forecast changes in economic fundamentals will impact on the performances of companies in the industry your group has chosen.

  Dividends have grown at a constant rate

A stock you are evaluating just paid an annual dividend of $2.50. Dividends have grown at a constant rate of 1.5 percent over the last 15 years and you expect this to continue. (LG 3-3) If the required rate of return on the stock is 12 percent, what ..

  Capital budgeting criteria-ethical considerations

A mining company is considering a new project. Because the mine has received a permit, the project would be legal; but it would cause significant harm to a nearby river. The firm could spend an additional $9.66 million at Year 0 to mitigate the envir..

  What is the firms marginal revenue function

The Madison Corporation, a monopolist, receives a report from a consulting firm Concluding that the demand function for its product is: What is the firm's Marginal Cost function? What is the firm's Marginal Revenue function? If per capita income is $..

  Find the net present value for series of future cash flows

Find the net present value (NPV) for the following series of future cash flows, assuming the company’s cost of capital is 10.19 percent. The initial outlay is $471,448.

  What is the expected annual cash flow

Cooper Commons is considering purchasing new, technologically advanced solar panels. The equipment will cost $625,000 with a salvage value of $50,000 at the end of its useful life of 10 years. The excess electricity from the panels will be sold back ..

  Frequent criticism of the management of publicly

A frequent criticism of the management of publicly-owned American companies is that they are too short-term oriented, too focused on fast returns, and that this negatively impacts their long term capital budgeting. How do we keep an emphasis on the "..

  Calculate the price of the call and put options

Find a call option and put option for a publicly traded company that have the same expiration date and exercise price. Calculate the price of the call and put options using the Black-Sholes pricing     model. Assume r = 1% and σ = .20

  What is the insurance trade off

Discuss some methods for maintaining and protecting your wealth. What is the insurance trade-off?- How does time affect your financial plan?

  Calculate the price of a cap on the 90 day libor rate

Calculate the price of a cap on the 90-day LIBOR rate in 9 months' time when the principal amount is $1,000. - Use Black's model.

  What is the total payment due for year three of this loan

Billingsley, Inc. is borrowing $60,000 for five years at an APR of 8 percent. The principal is to be repaid in equal annual payments over the life of the loan with interest paid annually. Payments will be made at the end of each year. What is the tot..

  Face value bonds-what is the current yield

The 8 percent, $1,000 face value bonds of Sweet Sue Foods are currently selling at $1,057. These bonds have 16 years left until maturity. What is the current yield?

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