A portfolio has 40% of its value in ABC shares and the rest in XYZ stock. The

Fantastic news! We've Found the answer you've been seeking!

Question:

A portfolio has 40% of its value in ABC shares and the rest in XYZ stock. The standard deviation of ABC and XYZ are 35% and 30%, respectively, and the correlation between ABC and XYZ is 0.4. What is the standard deviation of the portfolio?

Related Book For answer-question

Investments

ISBN: 9780073530703

9th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

See More Books

Posted Date: Jul 13, 2023 02:09 AM

See More Questions

The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
The expected return and standard deviation of the market portfolio are 8% and 12%, respectively. The expected return of security A is 6%. The standard deviation of security B is 18%, and its specific...
On May 8, 1984, Hannah Eisenstat graduated from Louisiana State University. She set to work opening a coffee shop in Baton Rouge called HannaH and found a perfect location in a new development. Using...
Figure 20.3 describes the Medicare Part D prescription drug benefi t. Look at the Web page www.partd-medicare.com/ in your area and determine the marginal coinsurance rates applicable in each...
STOCK ISSUANCE (NONCASH ASSETS, SUBSCRIPTION, AND TREASURY STOCK) Smith & Cline had the following stock transactions during the year: (a) Issued 5,000 shares of common stock with a $5 par value in...
The use of words that have specific meaning within a profession or group of people is referred to as ______.
In 2014, political consulting firm Cambridge Analytica developed an app designed to create digital profiles of individuals via their information. Cambridge Analytica collected the data by inviting...
At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the following balance sheet (in thousands of dollars). The court, after trying...
The eigenvalues, eigenvectors in Question-1 needs to be calculated by hand (not by computer). Questions-1: (9 mark) A car rental company has three locations. Every customer can rent from and return...
Reconsider the Lockhead Aircraft Co. problem presented in Problem 16.15 regarding a project to develop a new fighter airplane for the U.S. Air Force. Management is extremely concerned that current...
I already have the code for the two assignments below but there are some errors in the code, please help me fix them The assignments: E7.16/ Add a method to the Table class below that computes the...
Identifying your competition is very critical in marketing. Pick a hospitality company (a coffee shop, restaurant, hotel, or local casino) and identify the competitors at different levels.
Health care faces critical staffing shortages. How do I imagine you are part of the executive management team researching health care shortages? How do I outline some of the staffing shortages in the...
A.Differentiate between Savings and Investment. Why is this distinction important to the investor? B. Describe FOUR (4) advantages and disadvantages of investing in common stock versus corporate...
ESC230 Lab 1: Using abstract data types and object persistence We have seen that it is possible template a class using interface classes, generics and to create a persistent object or objects in Java...
20. Compute the left and right Riemann sums-L4 and R4, respectively for f(x) = (2-1xl) on [-2, 2]. Compute their average value and compare it with the area under the graph of f.
What is your assessment of the negotiations process, given what you have studied? What are your recommendations for Mr. Reed? You must justify your conclusions
Why are high-tax-bracket investors more inclined to invest in municipal bonds than low-bracket investors?
Which of the following sources of market inefficiency would be most easily exploited? a. A stock price drops suddenly due to a large block sale by an institution. b. A stock is overpriced because...
An investor takes as large a position as possible when an equilibrium price relationship is violated. This is an example of: a. A dominance argument. b. The mean-variance efficient frontier. c....
Classify the following topics as primarily macroeconomic or microeconomic: 1. The impact of a tax increase on aggregate output. 2. The relationship between two competing firms pricing behavior. 3. A...
Use the high and low volatility scenarios that we used for the call option to show that put options also are worth more when stock price volatility is higher.
In light of this discussion, explain why the put-call parity relationship is valid only for European options on non-dividend-paying stocks. If the stock pays no dividends, what inequality for...

A portfolio has 40% of its value in ABC shares and the rest in XYZ stock. The

Question:

Expert Answer:

Lets assume the total value of the portfolio is 1 or 100 Given that 40 of the portfolio ... View the full answer

Investments

Students also viewed these finance questions