What is the standard deviation of the portfolio

Assignment Help Accounting Basics
Reference no: EM133048382

Question 1 - Shakib Al Hasan is now planning to invest in a leveraged portfolio after his brief success in the stock market. He invests 100,000 Taka of his own money and 50,000 Taka of borrowed money in an index fund. The rate of interest is 10% on the borrowed money. The index fund has a return of 16% and a standard deviation of 30%. Calculate Shakib's expected risk and return if he opts for the above portfolio selection?

Question 2 - You are creating a portfolio consisting of 2 stocks only, Dulamia Cotton and GrameenPhone. You are investing $2,000 in Dulamia Cotton and $3,000 in GrameenPhone. Given that the expected return of Dulamia Cotton is 9% and the expected return from GrameenPhone 8% respectively.

a) What is the expected return of your portfolio? Given also that the expected standard deviations of Dulamia Cotton and GrameenPhone are 13.15% and 11.65% respectively.

b) What is the standard deviation of the portfolio, given that the correlation coefficient between the two stocks is 0.75.?

Reference no: EM133048382

Questions Cloud

Several types of changes : What do you believe is the most important change that led to GoPro's original success?
How much must they invest each year : Suppose the couple invests money on her birthday, starting today and ending 1 year before she starts university. How much must they invest each year
How could the bank learn the truth : You recently ran into one of your former high school teachers. You were surprised to learn that he'd left teaching, gone back to school, and, a little more than
Explain the constitutes leadership : OBTech Ltd is searching for a new vice-president of marketing and wants to find someone with excellent leadership qualities.
What is the standard deviation of the portfolio : You are investing $2,000 in Dulamia Cotton and $3,000 in GrameenPhone. What is the standard deviation of the portfolio
Produce better timing and convenience : What are some ways to produce better timing and convenience? What are some examples of customer convenience breakthroughs?
What is the beta of your portfolio : Question - You have decided to invest $6,000 in AGG stock with a beta of 1.6 and $4,000 in DEF stock with a beta of 0.5. What is the beta of your portfolio
What is Morrit TIE ratio : The Morrit Corporation has $480,000 of debt outstanding, and it pays an interest rate of 8% annually. What is Morrit TIE ratio
What do we mean by the state of nature : Be sure to explain each position sympathetically, and to always engage in critical reflection. Be sure to answer every part of each question.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How do determine the dollar amount of the total depreciation

How do determine the dollar amount of the total depreciation that will be contained in Cost of Goods Sold. (Round dollar values & enter as whole dollars only.)

  F 3 acquisition entry and consolidation working paper on

ltbrgt ltbrgt3. acquisition entry and consolidation working paper on january 31 2014 phoenix inc. acquired all of the

  Provide recommendations for implementing the training course

Provide recommendations for implementing the training course

  Explain the primary functions of internal controls procedure

Explain the primary functions of internal controls procedures in the accounting area. What is meant by separation of duties?

  What is the additional profit to the firm

A firm makes two products: frying pans and saucepans. If the firm sells 10o more saucepens, what is the additional profit to the firm

  Why do professionals need to learn about communication

Why do professionals need to learn about communication when skills used on the job are purely technical? Explain in detail with suitable example.

  What did the engineer mean about the large overhead rate

What did the engineer mean about the large overhead rate being a disadvantage when placing bids and seeking new business

  Examples of illegal employment questions

List five examples of illegal employment questions. [Use credible sources]. For each example, why do you think these questions are or are not legal to ask prospective employees?

  Determine the correct inventory amount on december 31

Josef sold goods costing $41,210 to Sorci Company, FOB shipping point, on December 28. Determine the correct inventory amount on December 31

  How much is elliott basis in the mini-warehouses

How much is Elliott's basis in the mini-warehouses? Elliot Mess exchanged a 12-unit apartment complex with Alfred Cappy for a 100-space

  Collegebooks company has two locations downtown and on

collegebooks company has two locations downtown and on campus. during march the company reported net income of 237000

  Compute the return on investment for each out-and-in burgers

You must prepare a return on investment analysis for the regional manager of Out-and-In Burgers. This growing chain is trying to decide which outlet.

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