Problem 9-12 Diversifying (LG9-4, LG9-5) Consider the characteristics of the following three stocks: Expected Return Standard...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Problem 9-12 Diversifying (LG9-4, LG9-5) Consider the characteristics of the following three stocks: Expected Return Standard Deviation Thumb Devices 15% 28% 13 13 25 26 Air Comfort Sport Garb The correlation between Thumb Devices and Air Comfort is -0.17. The correlation between Thumb Devices and Sport Garb is -0.14. The correlation between Air Comfort and Sport Garb is 0.80. Select only two stocks for your portfolio based on low correlation and low risk. Problem 9-12 Diversifying (LG9-4, LG9-5) Consider the characteristics of the following three stocks: Expected Return Standard Deviation Thumb Devices 15% 28% 13 13 25 26 Air Comfort Sport Garb The correlation between Thumb Devices and Air Comfort is -0.17. The correlation between Thumb Devices and Sport Garb is -0.14. The correlation between Air Comfort and Sport Garb is 0.80. Select only two stocks for your portfolio based on low correlation and low risk.
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
CPA firm brings in a yoga instructor during the tax busy season to help relieve stress of the employees. Which is true about the CPA firm's ability to take a deduction for the yoga instructor's...
-
Find the range of the projectile of Problem 60.
-
Crosshill Company's total overhead costs at various levels of activity are presented below: Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The...
-
Lauren Inc. makes three products that can be sold at split-off or processed further and then sold. The joint cost for April is \(\$ 1,080,000\). The number of ounces in a bottle of each product is:...
-
a. What steps might Gabriela follow to proceed with her investigation? b. What mistakes, if any, have already been made in the investigation? Gabriela Pearson is a professionally certified...
-
The required rate of return on the shares in the companies identified below is 10% pa. Calculate the current share price (ex-dividend) in each case. (a) The current earnings per share of Alpha Ltd...
-
A wheel has a radius of 3.5 m. How far (path length) does a point on the circumference travel if the wheel is rotated through the following angles, respectively? (a) 21 m (b) (c) 21 rad m 21 rev m
-
Name some refrigerants used widely in the vapour-compression cycle.
-
Deduce the Gibbs-Duhem relation for a multicomponent system.
-
Define the term 'excess property'. Give an informatory note on the excess free energy of a component in a mixture.
-
Derive an expression for the fugacity of a component in a mixture.
-
A vacuum gauge mounted on a condenser reads \(0.73 \mathrm{~mm} \mathrm{Hg}\). Determine the absolute pressure in the condenser in \(\mathrm{kPa}\) when the atmospheric pressure is \(101.35...
-
The next two questions (38 and 39) refer to the following: The time it takes Stana to get ready in the morning follows a normal distribution with a mean of 45 minutes and a standard deviation of 8...
-
Use multiplication or division of power series to find the first three nonzero terms in the Maclaurin series for each function. y = e x2 cos x
-
Which of the following is not an advantage of transferable pollution rights? a. They create incentives for polluters to develop cheaper ways to reduce pollution. b. They allow the greatest value of...
-
What is the relationship between externalities and property rights?
-
An advantage that corrective taxes and tradable emissions permits have over compliance standards is that the former a. works well even if pollution output cannot be accurately measured. b. results in...
Study smarter with the SolutionInn App