Question: Consider two high-risk stocks, X and Y. The expected return on stock Y is 16%, with a standard deviation of 13%. The expected return on

Consider two high-risk stocks, X and Y. The expected return on stock Y is 16%, with a standard deviation of 13%. The expected return on stock X is 20%, with a standard deviation of 25%.

The correlation between the returns of X and Y is + 0.3.

What is the expected return and standard deviation of 40% of Y investment and 60% of the portfolio of X investment?

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!

Consider two high-risk stocks, X and Y. The expected return on stock Y is 16%, with a standard deviation of 13%. The expected return on stock X is 20%, with a standard deviation of 25%. The...

Please post answers back in an excel file, Thank you. Question 1 Consider two hypothetical stocks, X and Y. The expected return on stock X is equal to 9% and the expected return on stock Y is equal...

Consider two hypothetical stocks, X and Y. The expected return on stock X is equal to 9% and the expected return on stock Y is equal to 15%. The standard deviation of stock X and Y are 19% and 27%,...

~~~In EXCEL~~~ Question 1: Consider two hypothetical stocks, X and Y. The expected return on stock X is equal to 9% and the expected return on stock Y is equal to 15%. Standard deviation of stock X...

Question 1: Consider two hypothetical stocks, X and Y. The expected return on stock X is equal to 17% and the expected return on stock Y is equal to 10%. The standard deviation of stock X and Y are...

IN EXCEL. Consider two hypothetical stocks, X and Y. The expected return on stock X is equal to 9% and the expected return on stock Y is equal to 15%. The standard deviation of stock X and Y are 19%...

PLEASE GIVE SOLUTION IN EXCEL. Question 1 : Consider two hypothetical stocks, X and Y . The expected return on stock X is equal to 9 % and the expected return on stock Y is equal to 1 5 % . The...

Consider two risky stocks. Stock A has an expected return of 14 percent and a standard deviation of 14. Stock B has an expected return of 13 percent and a standard deviation of 20 percent. The...

Consider two risky stocks. Stock A has an expected return of 13 percent and a standard deviation of 15. Stock B has an expected return of 13 percent and a standard deviation of 12 percent. The...

Consider two hypothetical stocks, X and Y. The expected return on stock X is equal to 9% and the expected return on stock Y is equal to 15%. Standard deviation of stock X and Y are 19% and 27%,...

A car dealer in KC specializes in selling cars from a Japanese manufacturer. The manufacturer is launching a new model this year and any order for this model placed by the dealer is fulfilled after a...

Keesha Co, borrows $175,000 cash on December 1 of the current year by signing a 120-day, 12%, $175,000 note. 1. On what date does this note mature? 2. & 3. What is the amount of interest expense...

3. Ammonia is manufactured from nitrogen and hydrogen in the Haber process. N 2 (g)+3H 2 (g) rightleftharpoons 2N*H_{3}(g) Delta*H = - 92kJ / m * ol (a) Name the raw materials from which the...

Which pricing tactic has different customers paying different prices? Leader pricing ( or loss - leader pricing ) Price bundling Flexible pricing Price lining

You have seen in this chapter how technological changes have had a dramatic impact on HRD implementation. Discuss and answer the question: What are some new things concerning training implementation...

What do the Kraiger et al. and Holton models of evaluation add to evaluation that is not included in Kirkpatricks model? What benefit, if any, is there to viewing evaluation in this way?

Compare and contrast Kirkpatricks original evaluation framework to the Expanded Kirkpatrick Evaluation Framework presented in the text. What is similar, and what is different about them?