Peter knows that the covariance in the return on two assets is 0.0025. Without knowing the expected
Question:
Peter knows that the covariance in the return on two assets is −0.0025. Without knowing the expected return of the two assets, explain what that covariance means.
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (11 reviews)
The covariance measure is dependent on the expected return of the two asset...View the full answer
Answered By
Asim farooq
I have done MS finance and expertise in the field of Accounting, finance, cost accounting, security analysis and portfolio management and management, MS office is at my fingertips, I want my client to take advantage of my practical knowledge. I have been mentoring my client on a freelancer website from last two years, Currently I am working in Telecom company as a financial analyst and before that working as an accountant with Pepsi for one year. I also join a nonprofit organization as a finance assistant to my job duties are making payment to client after tax calculation, I have started my professional career from teaching I was teaching to a master's level student for two years in the evening.
My Expert Service
Financial accounting, Financial management, Cost accounting, Human resource management, Business communication and report writing. Financial accounting : • Journal entries • Financial statements including balance sheet, Profit & Loss account, Cash flow statement • Adjustment entries • Ratio analysis • Accounting concepts • Single entry accounting • Double entry accounting • Bills of exchange • Bank reconciliation statements Cost accounting : • Budgeting • Job order costing • Process costing • Cost of goods sold Financial management : • Capital budgeting • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Discounted cash flows • Financial analysis • Capital assets pricing model • Simple interest, Compound interest & annuities
4.40+
65+ Reviews
86+ Question Solved
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1119371403
4th edition
Authors: Robert Parrino, David S. Kidwell, Thomas Bates
Question Posted:
Students also viewed these Business questions
-
Sumeet knows that the covariance in the return on two assets is 0.0025. Without knowing the expected return of the two assets, explain what that covariance means.
-
Emmy is analyzing a two-stock portfolio that consists of a Utility stock and a Commodity stock. She knows that the return on the Utility stock has a standard deviation of 40 percent and the return on...
-
Peter Kankel, the CFO of On- the- Go convenience stores, had only a couple of hours to decide what he would recommend. Decisions to add products are often challenging. Kankel knows that modern...
-
Based on the book values in the balance sheet of the company presented below, answer the following questions: Assets Liabilities and Shareholders Equity Asset (book value) $ 75 Debt $ 25 Equity $ 50...
-
The prepaid insurance account had a balance of $9,600 at the beginning of the year. The account was increased for $28,800 for premiums on policies purchased during the year. What is the adjustment...
-
In a preliminary study to determine whether the installation of a camera designed to catch cars that go through red lights affects the number of violators, the number of red-light runners was...
-
The F-test for two standard deviations is very sensitive to the normality assumption. In Exercises 7 and 8, determine whether the statement is true or false. If the statement is false, rewrite it as...
-
The beginning inventory of drift boats at Heritage Float Co. and data on purchases and sales for a three-month period are as follows: Instructions 1. Record the inventory, purchases, and cost of...
-
Handley Company sold equipment that had a book value of $16,200 for $18,000. The equipment originally cost $54,000 and it is estimated that it would cost $68,400 to replace the equipment. Prepare the...
-
List everyday experiences that support mastery of reaching, grasping, sitting, and crawling. Why should caregivers place young infants in a variety of waking-time body positions?
-
In February 2017 the risk-free rate was 2.97 percent, the market risk premium was 6 percent, and the beta for Twitter stock was 0.99. What is the expected return that was consistent with the...
-
What are the main differences between the corporate bond markets and stock markets?
-
Visit the Web site of a hotel chain. What does the Web site do to make the product tangible for the customer? Does anything in the site deal with the characteristic of perishables, for example,...
-
Question # 03 A sinusoidal wave traveling to the right along the x-axis with angular frequency w = 2nd, wave number k=2r/A, and amplitude a is (right) =a sin(koxx - wt) An equivalent wave traveling...
-
In retirement, Bill determined that he could safely invest $50,000 into a nonredeemable five-year GIC with a posted rate of 5.35% compounded semi-annually. Calculate the maturity value and the amount...
-
Shannon Company contracts to sell on September 1, 2022 equipment to a German purchaser. The price of the equipment is 200,000 and the bill will be settled in Euros. The future transaction is viewed...
-
A summary of the time tickets is as follows: Job No . Amount Job No . Amount 5 5 $ 3 , 3 0 0 Indirect $ 9 , 3 0 0 5 7 6 , 1 0 5 6 6 9 , 4 3 0 5 8 2 1 , 0 0 5 6 7 1 0 , 0 7 5 6 0 1 5 , 5 0 0...
-
At the beginning of 2025, Cullumber Construction Company changed from the cost-recovery method to recognizing revenue over time (percentage-of-completion) for financial reporting purposes. The...
-
Daily demand for automotive batteries in an automobile repair shop is normally distributed with a mean of 10 batteries and a standard deviation of 1 battery. The cost of a dissatisfied customer,...
-
The 2017 financial statements of the U.S. government are available at: https://www.fiscal.treasury.gov/fsreports/rpt/finrep/fr/fr_index.htm Use these to answer the following questions: a. Statement...
-
EFN and Internal Growth Redo Problem 25 using sales growth rates of 15 and 25 percent in addition to 20 percent illustrate graphically the relationship between EFN and the growth rate, and use this...
-
EFN and Internal Growth Redo Problem 25 using sales growth rates of 15 and 25 percent in addition to 20 percent illustrate graphically the relationship between EFN and the growth rate, and use this...
-
EFN and Sustainable Growth Redo Problem 27 using sales growth rates of 30 and 35 percent in addition to 20 percent, illustrate graphically the relationship between EFN and the growth rate, and use...
-
The United Auto Workers ( UAW ) and Ford Motor Company were negotiating a new agreement to address industry issues during a severe economic downturn. Ford offered to consider delaying layoffs if the...
-
An important step in the event tourism strategy process is 'Strategy Development'. Discuss the three (3) main strategic options for a destination to develop its event portfolio and the conditions...
-
IKEA is a multinational corporation with a proven track record of listening to stakeholders in ways that improve relationships and the bottom line. Conduct your own research on IKEA and develop a...
Study smarter with the SolutionInn App