Question: Calculate the portfolio return in each year, and the expected rate of return and standard deviation for stocks w, m and portfolio mw. (We invest

Calculate the portfolio return in each year, and the expected rate

Calculate the portfolio return in each year, and the expected rate of return and standard deviation for stocks w, m and portfolio mw. (We invest 50% in Stock W)

Please don't solve the problem in excel!Thank you!

Example 8: Assuming 50% of investment is on W, and the rest 50% is on M- Returns with Perfect Negative correlation, p = -1.0 FIGURE 8.4 B D E F G H Rate of Return Stocks Wand M, held separately 30% WM 15% -10% 15% 40% Rate of Return (%) Portfolio WM 0% 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 -15% 2010 Year 2010 2011 2012 2013 2014 Avg return = = 2011 2012 2013 2014 -10% 15% 40% Rate of Return (%) Stock W Stock M Portfolio WM 40% -10% 15% -10% 40% 15% 40% -10% 15% -10% 40% 15% 15% 15% 15% 15.00% 15.00% 15.00% =AVERAGE(D132:1136) 25.00% 25.00% 0.00% =STDEV(D132:D136) Correlation coefficient = -1.00 =CORREL(B132:B136,C132:C136) Cengage learning 2015

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!

What is the total amount of Jason's home office deduction? $ 1 6 , 7 3 8 $ 2 , 4 6 2 $ 2 , 4 1 0 $ 7 2 0

Calculate the portfolio return in each year, and the expected rate of return and standard deviation for stocks w, m and portfolio mw. (We invest 50% in Stock W) Please don't solve the problem in...

Calculate the portfolio return in each year, and the expected rate of return and standard deviation for stocks w, m and portfolio mw. (We invest 50% in Stock W.) Example 8: Assuming 50% of investment...

1. Calculate the portfolio return in each year, and the expected rate of return and standard deviation for stocks w, m and portfolio mw in example 8 in handout #4 (We invest 50% in Stock W.) Show...

Since the sample size is very small, (only 5 years), n-1 should be used instead of n to get an unbiased estimator for the variance. Calculate the portfolio return in each year, and the expected rate...

Calculate the portfolio return in each year, and the expected rate of return and standard deviation for stocks w, y and portfolio. We invest 50% in Stock W.) Example 9: Diversification with stocks...

2. Calculate the portfolio return in each year, and the expected rate of return and standard deviation for stocks w, y and portfolio wy in example attached in handout #4 (We invest 50% in Stock W.)...

Since the sample size is very small, (only 5 years), "n-1" should be used instead of "n" to get an unbiased estimator for the variance. Calculate the portfolio return in each year, and the expected...

1. Consider the following probability distribution for stocks A and B Probability State Return on Stock A Return on Stock B 11% 12% 30% 10% 15% 2 40% 18% 30% 15% 3 1) What are the expected rates of...

2. Given the anticipated rates of return for Delphi and Groupon, their respective Betas, and assuming the portfolio anticipated return is equal to the market return, explain why Delphi and Groupon...

Rate of Return Scenario Probability Stocks Bonds Recession .30 -4% +16% Normal economy .50 +17 +10 Boom .20 +28 +9 Consider a portfolio with weights of .7 in stocks and .3 in bonds. a. What is the...

Derive the formulation expression for the intrinsic carrier concentration in the intrinsic semiconductor. 2rkT n, = Ae 2kT where A=2| h? (m, xm,

Will upvote. (10%) Problem 10: Consider a 120 V AC microwave oven that draws 9.5 A. Randomized Variables I= 9.5 A What is the maximum instantaneous power consumption, in kilowatts, of the microwave?...

Management of Cullumber Home Furnishings is conidering acpuiring a new machine that can create customized window treatments. The equipment will cost $ 1 9 9 , 5 5 0 and will generate cach flows of $...

CT Corp Comprehensive Question Canadian Tire Corporation, Limited ( Canadian Tire ) is a family of companies that includes a retail segment and a financial services division, among others. The retail...

5. The computer imposes a discipline of linear thinking. Organizations will need to find ways to encourage and protect nonlinear thinking and communicating.

7. Where Do We Begin?

a. What is the purpose of the team?