Question: can u break down the third step of finding standard deviation There are two stocks you are considering purchasing. Stock x has an expected return
There are two stocks you are considering purchasing. Stock x has an expected return of $12.75, a standard deviation of 27 percent a correlation with the market of 22 and a correlation with 5 tock Y of 32. Stock Y is now trading at $48/ share. The price of Stock Y next year will be $39/ share if there is a recession, $60/ share if normal and $72/ share if thee economy is expanding. The probabinit of a recession is 15% and normal is 55%. Stock Y has a .7 correlation with the market portfollo. The market portfolio has a standard deviation of 16%. That is the expected return and standard deviation of a portfolio that hold 60% in stock X and 40% in Stock Y? What is the beta of the portfolio? There are two stocks you are considering purchasing . 5tock has an expected return of $12.75, a standard deviation of 27 percent a correlation with the market of 22 and a correlation with 5 tock y of 32. Stock Y is now trading at $48/ share. The price of 5 tock Y next year will be $39/ share if there is a recession, $60/ share if normal and $72/ share if thee economy is expanding. The probabihty of a recession Is 15% and normal is 55%. Stock Y has a 7 correlation with the market portfolio. The market. portfolio has a standard deviation of 16%. That is the expected return and standard deviation of a portfolio that hold 60% in stock X and 40% in Stock Y? What is the beta of the portfolio
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
