The following are the expected return of two types of securities: REQUIRED (0) (ii) (iii) (iv)...
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The following are the expected return of two types of securities: REQUIRED (0) (ii) (iii) (iv) 3 3 An investor places 25% of his savings in Yew Ltd and 75% in Berry Ltd. (v) Economic conditions under Scenario A Scenario B Scenario C (vi) (vii) Probability 0.2 0.5 0.3 Returns (%) Yew Ltd 18 32 38 Berry Ltd 14 28 4 Calculate the expected return of Yew Ltd and Berry Ltd. Calculate the standard deviation of Yew Ltd and Berry Ltd. Calculate the covariance between Yew Ltd and Berry Ltd. Calculate the expected return of the portfolio. Calculate the standard deviation of the portfolio. Calculate the correlation coefficient between Yew Ltd and Berry Ltd. [3 marks] [4 marks] [4 marks] [2 marks] [3 marks] [5 marks] Calculate the percentage that an investor should invest in Berry Ltd to achieve minimum variance portfolio. The following are the expected return of two types of securities: REQUIRED (0) (ii) (iii) (iv) 3 3 An investor places 25% of his savings in Yew Ltd and 75% in Berry Ltd. (v) Economic conditions under Scenario A Scenario B Scenario C (vi) (vii) Probability 0.2 0.5 0.3 Returns (%) Yew Ltd 18 32 38 Berry Ltd 14 28 4 Calculate the expected return of Yew Ltd and Berry Ltd. Calculate the standard deviation of Yew Ltd and Berry Ltd. Calculate the covariance between Yew Ltd and Berry Ltd. Calculate the expected return of the portfolio. Calculate the standard deviation of the portfolio. Calculate the correlation coefficient between Yew Ltd and Berry Ltd. [3 marks] [4 marks] [4 marks] [2 marks] [3 marks] [5 marks] Calculate the percentage that an investor should invest in Berry Ltd to achieve minimum variance portfolio.
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To calculate the expected return of Yew Ltd and Berry Ltd we will multiply the return of each security by their respective probabilities and sum them ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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