Question: The standard deviation of Shamrock Corp stock is 19 percent
The standard deviation of Shamrock Corp. stock is 19 percent. The standard deviation of Cara Co. stock is 14 percent. The covariance between these two stocks is 100. What is the correlation between Shamrock and Cara stock?
Relevant QuestionsThe following information applies to Questions 1a and 1b. The general equation for the weight of the first security to achieve minimum variance (in a two-stock portfolio) is given bya. Show that w1 = 0.5 when σ1 = σ2.b. ...What are the similarities and differences between the CML and SML as models of the risk-return trade-off?Assume that you expect the economy’s rate of inflation to be 3 percent, giving an RFR of6 percent and a market return (RM) of 12 percent.a. Draw the SML under these assumptions.b. Subsequently, you expect the rate of ...Given the following results, indicate what will happen to the beta for Sophie Fashion Co., relative to the market proxy, compared to the beta relative to the true market portfolio:Discuss the reason for the differences in ...How can multifactor models be used to help investors understand the relative risk exposures in their portfolios relative to a benchmark portfolio? Support your answer with examples using both macroeconomic and microeconomic ...
Post your question