What is the standard deviation of the portfolio

Assignment Help Financial Management
Reference no: EM131520479

Stock X has a beta of 1.5 and standard deviation of 45%. A risk-free rate is 5% and an expected return on the market portfolio is 12%. a. What is the expected return of Stock X? b. You would like to find a portfolio on the capital market line that has the same expected return as Stock X. How much must you invest in the market portfolio? c. What is the standard deviation of the portfolio you constructed from the part b? d. Compare the standard deviation of the portfolio you constructed (your answer from part c) and the standard deviation of Stock x. Why does Stock x have a higher standard deviation?

Reference no: EM131520479

Questions Cloud

What will cash flows for this project be : Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans. what will the cash flows for this project be?
List the benefits of the epos system : HS plc is a large quoted company, which owns and maintains 42 large supermarkets in the country in which it operates. Each supermarket sells a very wide range.
What would be the weight used for equity in computation : what would be the weight used for equity in the computation of Tom and Jerry's WACC?
What was reborn in the renaissance : What was "reborn in the Renaissance"? Why is William Shakespeare unique and studied 400 years after his death? Describe the Black Death
What is the standard deviation of the portfolio : What is the standard deviation of the portfolio you constructed from the part b?
Discuss all the stages of cima : The board of JH Ltd has become aware that there is no IT strategy in place within the company. A decision has therefore been made to establish a working.
What would be the weight used for equity in the computation : what would be the weight used for equity in the computation of Tom and Jerry's WACC?
Calculate the value of the forward contract : A long forward contract on a non-dividend-paying stock was entered into some time ago. Calculate the value of the forward contract?
How should he reason about trusting god and treating james : Under the Christian narrative and Christian vision, what sorts of issues are most pressing in this case study?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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