Diversification in Stock Portfolios Consider an economy with two types of firms, S and I. S firms

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

Question:

Diversification in Stock Portfolios

Consider an economy with two types of firms, S and I. S firms all move together. I firms move independently. For both types of firms there is a 45% probability that the firm will have a 7% return and a 55% probability that the firm will have a -18% return. What is thevolatility (standard deviation)of a portfolio that consists of an equal investment in:

32 firms of type S? Standard deviation isAnswer ------

%. (Round to two decimal points.)

32 firms of type I? Standard deviation isAnswer -----

%. (Round to two decimal points.)

Posted Date: May 18, 2024 10:17 AM

See More Questions

DS Unlimited has the following transactions during August. August 6 Purchases 88 handheld game devices on account from GameGirl, Inc., for $290 each, terms 1/10, n/60. August 7 Pays $490 to Sure...
When Polledo Corporation was organized in January 2012, it immediately issued 5,000 shares of $50 par, 5 percent, cumulative preferred stock and 10,000 shares of $10 par common stock. The companys...
What industries are more likely to hire contingent workers?
Dividends per Share Calculate the company's dividend paid per share of common stock. What was the dividend payout ratio? Use the following financial data for Brenner Instruments Sales revenue.. Cost...
At December 31, 2014, the trial balance of Mariette Company contained the following amounts before adjustment. Instructions (a) Prepare the adjusting entry at December 31, 2014, to record bad debt...
According to the 2020 U.S. Census, the American population is much more multiracial, and more racially and ethnically diverse than ever before. In the context of situation analysis, under which...
Based on the U.S. ASPE chart, if you are a three-person household, what income would you need to be considered below the poverty line? Table titled Poverty Thresholds for 2021 by Size of Family and...
Q1) (25 points) Cold water moves at a rate of m=0.2 kg/s through a 5 mm diameter horizontal tube submerged in a large hot water bath maintained at 80C. Convection heat transfer coefficient outside of...
The following data were collected as part of a quality control study for the analysis of sodium in serum; results are concentrations of Na+ in mmol/L. 140 143 141 137 132 157 143 149 118 145...
For each of the four stages of the product life cycle, describe the marketing strategy that you would use if your product were in that stage, and name at least one example of a product that you feel...
1. Consider a firm which produces according to the following production function by using labor and capital: f (k,l) = min (5k, 101)
Lesotho'footwear industry manufacturer one in maseru and other in maputsoe.aputsoe.in maseru te marginal benefit associated wih ppolluiio cleeanup is MB = 3 0 0 - 1 0 Q while in maputsoe te marginal...
Analyze the micro-instruction format to distribute 36 bits for each part with main function.
If the amplifier indicated by the box input impedance of oo, which of the following statements are true ? has an open loop gain as well as Feedback factor (\beta = 1/ R_1\) The feedback is voltage...
An organization with a mission to build is in rapid expansion and growth. An organization with a mission to harvest is in a mature market. Assuming compensation is based on each of the factors listed...
Repeat Example $15-7$ except with a forced flow with a velocity of $1.05 \mathrm{~cm} / \mathrm{s}$ past the sphere. Use Eq. (15-60b) to determine $\mathrm{k}_{\mathrm{c}}$. The viscosity of...
Two identical large glass bulbs are filled with gases and connected by a capillary tube that is $\delta=0.0100 \mathrm{~m}$ long. Bulb 1 at $\mathrm{z}=0$ contains the following mole fractions:...

Diversification in Stock Portfolios Consider an economy with two types of firms, S and I. S firms

Question:

Expert Answer:

Students also viewed these finance questions