You have a three-stock portfolio. Stock A has an expected return of 11 percent and a...
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You have a three-stock portfolio. Stock A has an expected return of 11 percent and a standard deviation of 36 percent, Stock B has an expected return of 15 percent and a standard deviation of 41 percent, and Stock C has an expected return of 15 percent and a standard deviation of 41 percent. The correlation between Stocks A and B is 0.30, between Stocks A and C is 0.20, and between Stocks B and C is 0.05. Your portfolio consists of 42 percent Stock A, 25 percent Stock B, and 33 percent Stock C. Calculate the expected return and standard deviation of your portfolio. The formula for calculating the variance of a three-stock portfolio is: 2 20 + x + xc c+ 2BBCorr (R, RB) + XA A 2xAXCO ACCorr (RA, RC) + 2xBxBoccorr(RB, Rc) (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Expected return % Standard deviation % You have a three-stock portfolio. Stock A has an expected return of 11 percent and a standard deviation of 36 percent, Stock B has an expected return of 15 percent and a standard deviation of 41 percent, and Stock C has an expected return of 15 percent and a standard deviation of 41 percent. The correlation between Stocks A and B is 0.30, between Stocks A and C is 0.20, and between Stocks B and C is 0.05. Your portfolio consists of 42 percent Stock A, 25 percent Stock B, and 33 percent Stock C. Calculate the expected return and standard deviation of your portfolio. The formula for calculating the variance of a three-stock portfolio is: 2 20 + x + xc c+ 2BBCorr (R, RB) + XA A 2xAXCO ACCorr (RA, RC) + 2xBxBoccorr(RB, Rc) (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Expected return % Standard deviation %
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Related Book For
Corporate Finance Core Principles And Applications
ISBN: 9781260571127
6th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
Posted Date:
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