Question: 4 . There are two ways to calculate the expected return of a portfolio: Either calculate the expected return using the value and dividend stream

4 . There are two ways to calculate the expected return of a portfolio: Either calculate the expected return using the value and dividend stream of the portfolio as a whole, or calculate the weighted average of the expected returns of the individual stocks that make up the portfolio. Which return is higher?

4 . There are two ways to calculate the expected return of

a. What are the expected returns of the two stocks? b. What are the standard deviations of the returns of the two stocks? c. If their correlation is 0.47, what is the expected return and standard deviation of a portfolio of 55% stock A and 45% stock B

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

~4) There are two ways to calculate the expected return of a portfolio: Either calculate the expected return using the value and dividend stream of the portfolio as a whole, or calculate the weighted...

4 4 There are two ways to calculate the expected return of a portfolio: Either calculate the expected return using the value and dividend stream of the portfolio as a whole, or calculate the weighted...

4. There are two ways to calculate the expected return of a portfolio: either calculate the expected return using the value and dividend stream of the portfolio as a whole, or calculate the weighted...

There are two ways to calculate the expected return of a portfolio: Either calculate the expected return using the value and dividend stream of the portfolio as a whole, or calculate the weighted...

There are two ways to calculate the expected return of a portfolio. Either calculate the expected return using the value and dividend stream of the portfolio as a whole or calculate the weighted...

There are two ways to calculate the expected return of a portfolio: Either calculate the expected return using the value and dividend stream of the portfolio as a whole, or calculate the weighted...

Modern Furniture Company had finally arrived at the point where it had a sufficient excess cash flow of $4.8 million to consider paying a dividend. It had 3 million shares of stock outstanding and...

An investigative question in your employee satisfaction study seeks to assess employee job involvement. Create a measurement question that uses the following scales: a. A graphic rating scale. b. A...

For ordinary agitation problems, a ) 8 baffles are specified b ) 4 - 1 6 impeller blades are specified both a and b neither a nor b

Bartmess and Cerny ( 1 9 9 6 ) identify three elements of a core capability that hinders imitation; which of the following is NOT one of these elements?

3. Several years ago, 8,000 Amtrak workers agreed not to disrupt service by walking out, at least not until a court hearing was held. Amtrak had asked the courts for a temporary restraining order,...

6. What actions might make employers lose elections?

3. This case and this chapter both had something to say about how organizational culture influences ethical behavior. What role do you think culture played at Enron? Give five specific examples of...