# Question: For the portfolio in Problem 23 if the correlation between

For the portfolio in Problem 23, if the correlation between Johnson & Johnson’s and Walgreen’s stock were to increase,

a. Would the expected return of the portfolio rise or fall?

b. Would the volatility of the portfolio rise orfall?

a. Would the expected return of the portfolio rise or fall?

b. Would the volatility of the portfolio rise orfall?

## Answer to relevant Questions

Calculate (a) the expected return and (b) the volatility (standard deviation) of a portfolio that consists of a long position of $10,000 in Johnson & Johnson and a short position of $2000 inWalgreen’s.You currently have $100,000 invested in a portfolio that has an expected return of 12% and a volatility of 8%. Suppose the risk-free rate is 5%, and there is another portfolio that has an expected return of 20% and a ...Standard and Poor’s also publishes the S&P Equal Weight Index, which is an equally weighted version of the S&P 500.a. To maintain a portfolio that tracks this index, what trades would need to be made in response to daily ...Consider the following airline industry data from mid-2009:a. Use the estimates in Table 12.3 to estimate the debt beta for each firm (use an average if multiple ratings are listed).b. Estimate the asset beta for each ...Each of the six firms in the table below is expected to pay the listed dividend payment every year in perpetuity.a. Using the cost of capital in the table, calculate the market value of each firm.b. Rank the three S firms ...Post your question