Given the following expectations for return, risk and correlation: E (r) a psb 0.22 0.31 -0.25...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Given the following expectations for return, risk and correlation: E (r) a psb 0.22 0.31 -0.25 Portfolio S Portfolio B 0.1 0.06 Risk-free 0.055 An optimal portfolio of S and B has been calculated to contain 0.5 stocks, i.e. portfolio S (out of a possible 100% or 1.0). What would be the standard deviation of the optimal portfolio from S and B? O 0.1706 O 0.1590 O 0.1774 O 0.1639 O 0.1503 Given the following expectations for return, risk and correlation: E (r) a psb 0.22 0.31 -0.25 Portfolio S Portfolio B 0.1 0.06 Risk-free 0.055 An optimal portfolio of S and B has been calculated to contain 0.5 stocks, i.e. portfolio S (out of a possible 100% or 1.0). What would be the standard deviation of the optimal portfolio from S and B? O 0.1706 O 0.1590 O 0.1774 O 0.1639 O 0.1503
Expert Answer:
Answer rating: 100% (QA)
Answer ANSWER 1 a 1503 Portfolio standard deviation W1 2 x Std dev1 2 W2 2 x Std dev2 2 2 ... View the full answer
Related Book For
Understanding Basic Statistics
ISBN: 9781111827021
6th Edition
Authors: Charles Henry Brase, Corrinne Pellillo Brase
Posted Date:
Students also viewed these accounting questions
-
Given the following expectations for return, risk and correlation, what is the covariance of returns for portfolios of S and B? [Calculate this to 5 decimal points] Portfolio S Portfolio B 0.08 0.14...
-
The Vargas Company had the following expectations for the year: Budgeted results for the year were: Total market for the product Vargass budgeted sales Variable costs per unit 175,900 units...
-
In developing a BCG or IE Matrix, what would be a good surrogate for revenues for 1) Target Corp., 2) Burger King, 3) Bank of America, and 4) Spirit Airlines.
-
XYZ Corporation is considering two mutually exclusive projects that require a $150,000 investment each. Project A has an expected life of 6 years and will generate net cash flows of $35,000 per year....
-
Marj Plimpton is the owner of a hairdressing salon in New York City. Her salon provides three basic services: shampoo and set, permanent, and cut and blow dry. Its operating results from the past...
-
Let y = f (x) be a cubic polynomial with leading coefficient a = 1 and f (2) = f (i) = 0. Write an equation for f.
-
Draw a UML sequence diagram for a use case for an attack on a car through its telematics unit. The attack first modifies the software on the telematics unit, then modifies software on the brake unit....
-
Selected transactions from the journal of Consuela Brown, investment broker, are presented below.Instructions(a) Post the transactions to T accounts.(b) Prepare a trial balance at August 31,2012....
-
Ms. F is being converted from an IV antibiotic to PO Cefadroxil in preparation for her discharge home. Order: Cefadroxil 0.5 g PO bid. Supply: cefadroxil 500 mg tablets. How many tablet(s) will Ms. F...
-
Should Grand Central Publishing continue to bid for Dewey, wait for the scheduled auction with several interested publishers, or pull out of the race? Why? 2. What is the role of authors, agents, and...
-
Radioco manufactures two types of radios. The only scarce resource that is needed to produce radios is labor. At present, the company has two laborers. Laborer 1 is willing to work up to 40 hours per...
-
Fair Access to Insurance Requirements (FAIR) plans are designed to assist which one of the following types of individuals with his or her insurance needs?
-
What is produced by photosynthesis?
-
A DNA fragment of 2000 base pairs (bp) in length is subjected to double digestion with two restriction enzymes, EcoRI and Hindill. EcoRI cuts the DNA at a specific recognition sequence, generating...
-
Inventory Management Williams & Sons last year reported sales of $44 million, cost of goods sold (COGS) of $36 and an inventory turnover ratio of 4. The company is now adopting a new inventory...
-
Cartwright made two announcements concerning its common stock today. First, the company announced that the next annual dividend will be $1.75 a share. Secondly, all dividends after that will increase...
-
Anna is a partner in a multi-partner advisory firm, where all of the partners have expertise in different areas. Anna does not have expertise in SMSF but Peter, another partner, does. Anna has a new...
-
In the simple quantity theory of money, what will lead to an increase in aggregate demand? In monetarism, what will lead to an increase in aggregate demand?
-
Tree-ring dates were used extensively in archaeological studies at Burnt Mesa Pueblo (Bandelier Archaeological Excavation Project: Summer 1989 Excavations at Burnt Mesa Pueblo, edited by Kohler,...
-
Suppose you are assigned the number 1, and the other students in your statistics class call out consecutive numbers until each person in the class has his or her own number. Explain how you could get...
-
For mallard ducks and Canada geese, what percentage of nests are successful (at least one offspring survives)? Studies in Montana, Illinois, Wyoming, Utah, and California gave the following...
-
Let \(X_{1}, \ldots, X_{n}\) be a set of independent and identically distributed random variables from a distribution \(F\) that has parameter \(\theta\). Let \(\hat{\theta}_{n}\) be an unbiased...
-
Consider an arbitrary probability measure space \((\Omega, \mathcal{F}, P)\) and let \(X_{r}\) be the collection of all possible random variables \(X\) that map \(\Omega\) to \(\mathbb{R}\) subject...
-
Within the context of Exercise 1, let \(\|X\|_{r}\) be defined for \(X \in X_{r}\) as \[\|X\|_{r}=\left[\int_{\Omega}|X(\omega)|^{r} d P(\omega)ight]^{1 / r}\] Prove that \(\|X\|_{r}\) is a norm....
Study smarter with the SolutionInn App