Question: How can the weight given to a particular stock in
How can the weight given to a particular stock in a portfolio exceed 100 percent?
Answer to relevant QuestionsWhy is the standard deviation of a portfolio typically less than the weighted average of the standard deviations of the assets in the portfolio, while a portfolios beta equals the weighted average of the betas of the stocks ...What are the desirable characteristics of a capital budgeting decision- making tool? If the IRR for a given project exceeds a firm’s hurdle rate, does that mean that the project necessarily has a positive NPV? Explain. What role does the human element play in the capital budgeting decision process? Could it cause a negative NPV project to be accepted? Why must manager intuition be part of the investment- decision process regardless of a project NPV or IRR? Why is it helpful to think about real options when making an investment decision?
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