What is the weight on the bond

Assignment Help Finance Basics
Reference no: EM131971864

Question: Suppose you construct a portfolio of one stock and one bond that have a correlation of -0.5. The stock has a standard deviation of 16 percent and the bond has a standard deviation of 12 percent. What is the weight on the bond that will produce the lowest standard deviation?

Reference no: EM131971864

Questions Cloud

Demonstrate what the strategic initiative is : Demonstrate what the strategic initiative is, why your plan can help the organization achieve and maintain a sustainable competitive advantage.
What is the effective annual interest rate on given loan : In exchange for a $570 million fixed commitment line of credit, your firm has agreed to do the following: 1. Pay 1 percent per quarter on any funds actually.
Result of the increased competition : Suppose the number of firms you compete with has recently increased. You estimated that as a result of the increased competition, the demand elasticity
What amount of gain or loss does edie recognize : What amount of gain or loss does Edie recognize if the transaction is structured as a stock-for-stock Type B acquisition?
What is the weight on the bond : Suppose you construct a portfolio of one stock and one bond that have a correlation of -0.5. The stock has a standard deviation of 16 percent.
Suppose the price of bread : Suppose the price of bread (not adjusted for inflation) in a country is $3.00 in 2015 and it was $2 back in 1980. If the 2015 CPI is 240 and the 1980
What are example of the list for a small business firm : What are example of this list for a small business firm? Type of power supply Type of motherboard Type of CPU and memory Types of storage and capacities.
Average annual return on investment : She just sold the property for $160,000. What was her average annual return on this investment?
Describe how the element would be measured or evaluated : Using the technology you have selected, define and describe how the element would be measured or evaluated.

Reviews

Write a Review

Finance Basics Questions & Answers

  Suppose that your aunt sold her house on december 31 and

assume that your aunt sold her house on december 31 and that she took a mortgage in the amount of 10000 as part of the

  Compute the amount the company saves

Suppose the Swedish parliament passed a law decreasing the income tax rate to 50% and increasing the duty on heart monitors to 20%. Repeat number 1, using the new facts.

  The timberlake-jackson wardrobe company has 10 percent

the timberlake-jackson wardrobe company has 10 percent coupon bonds on the market with nine years left to maturity.

  Calculate npv of all lease payments

yearly payments of $50,000 paid at the starting of each of the next five years (total of $250,000). Calculate the NPV of all lease payments?

  Stock analysis for new baby bottle business company venture

Stock Analysis for a new baby bottle business company venture. Produce a a stock analysis of a company that is similar to your a baby bottle or sippy cup. within the same field. Example "Lolla Cup" or NUK, Dr. Brown.

  What does the capm predict about the expected return

Beta and CAPM. Is it possible that a risky asset could have a beta of zero? Explain. Based on the CAPM, what is the expected return on such an asset?

  Predict one major change in the us financial environment

1. predict one major change in the u.s. financial environment that may likely occur within the next five years

  Prepare a classified balance sheet

Refer to the adjusted trial balance in E3-16.

  What role do financial institutions play in such a project

You are the CFO of the College; how does the President goes about to finance these long terms projects that will cost between $20 million to $35 million? What role do financial Institutions play in such a project

  How is risk incorporated into the capital budgeting process

How is risk incorporated into the capital budgeting process?

  Interest on outstanding balances paid monthly

As a jewelry store manager, you want to offer credit, with interest on outstanding balances paid monthly. To carry receivables, you must borrow funds from your bank at a nominal 6%, monthly compounding.

  What internal rate of return can the firm earn

What internal rate of return can the firm earn from this project? (round to the nearest percent.)

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