Question: Answer in Excel with formulas Stock 1 has a expected return of 12% and a standard deviation of 15%. Stock 2 has a expected return

Answer in Excel with formulas

Stock 1 has a expected return of 12% and a standard deviation of 15%. Stock 2 has a expected return of 10% and a standard deviation of 12%. Correlation between the two stocks is 0.3. What is the investment proportion of stock 1 in the minimum variance portfolio? (0.344) Now assume a risk-free bond with a rate of return of 8%. Can you achieve a better rate for the same (minimum) variance in question 2, using the risk-free bond as well? What is closest to the best such rate of return? Group of answer choices 0.13 0.14 0.11 0.12

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!

Stock X has an expected return of 12% and the standard deviation of the expected return is 20%. Stock Z has an expected return of 7% and the standard deviation of the expected return is 15%. The...

PLEASE SHOW STEPS AND FORMULAS IN EXCEL Intro Stock 1 has an expected return of 15% and a standard deviation of 39%. Stock 2 has an expected return of 6% and a standard deviation of 24%. Their...

QUESTION 10 "An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 12% and a standard deviation of return of 9%. Stock B has an expected return of...

2. Suppose Stock A has an expected return of 12% and a standard deviation of 19% while Stock B has an expected return of 15% and a standard deviation of 22%, and the correlation between the two...

Stock 1 has a expected return of 12% and a standard deviation of 15%. Stock 2 has a expected return of 10% and a standard deviation of 12%. Correlation between the two stocks is 0.3. What is the...

Stock A has an expected return of 12% and a standard deviation of 12%. Stock B has an expected return of 7% and a standard deviation of 5%. The correlation petween the returns of stock A and B is...

Stock 1 has a expected return of 12% and a standard deviation of 15%. Stock 2 has a expected return of 10% and a standard deviation of 12%. Correlation between the two stocks is 0.3. What is the...

Stock A has an expected return of 12% and a standard deviation of its return of 20%. Stock B has an expected return of 18% and a standard deviation of its return of 35%. What is the expected return...

Intro Stock 1 has an expected return of 8% and a standard deviation of 29%. Stock 2 has an expected return of 12% and a standard deviation of 14%. Their correlation is -0.27. Attempt 1/3 for 10 pts....

Evaluate the following limit. 3t lim 4e i- 5j+4 tan 'tk t+5 3t lim 4e i-+ 4 tan 'tk =| (Type an exact answer, using t as needed.)

Consider the sequence defined by the recursive definition a 1 = 3 and a n = 2a n-1 +3. Show that the closed formula an = 3 . (2 n 1) by mathematical induction.

Question 3 : How important is growth to a stock s value? Illustrate with examples. In addition, under what conditions would the constant growth rate model not be appropriate? Explain why using the P...

Based on your understanding 1. Define Internal Control 2. What is COBIT 5, explain the five key principles 3. Identify the seven categories of Enterprise Enablers 4. What is COSO Internal Control...

You work for a nonprofit group that brings aid to underdeveloped countries across the world. Presently, you are in South America helping a small tribe build a waterworks station to bring much-needed...

How does your physical environment restrict and enhance your sensation; that is, how does it affect what you see, hear, taste, touch, and smell? Give examples.

When you actually meet someone from a different culture, what do you remember about him or her?