Question: Expected Return Standard deviation Stock A 13% 5% Stock B 16% 6.50% Correlation 0.8 0.8 If you hold equal weights of both stocks in your

Expected Return Standard deviation
Stock A 13% 5%
Stock B 16% 6.50%
Correlation 0.8 0.8

If you hold equal weights of both stocks in your portfolio:

1- Calculate the portfolio return. (Show your work)

2- Calculate the portfolio std. (Show your work)

3- Calculate Coefficient of Variation of Stock A. (Show your work)

4- Calculate Coefficient of Variation of Stock B. (Show your work)

5- If the correlation is -0.8, Calculate the portfolio expected return and standard deviation. (Show your work)

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!

Q:

5. The following information is available to an investor, Mr A, with degrees of risk aversions as 3 and quadratic utility functions: Security Expected Return Standard Deviation Stock M 10% 5% Stock N...

Q:

5. The following information is available to two investors, X and Y with degrees of risk aversions as 3 and 9: Security Expected Return Standard Deviation Stock A 10% 5% Stock B 16% 15% Stock C 19%...

Q:

Required information [The following information applies to the questions displayed below.) A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a...

Q:

Explanation 36% 16% 7% A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill...

Q:

please show all handwritten work/formulas (not on excel) solve 8,9,10,11,12 please. will upvote and much appreciate it! Please solve 8,9,10,11,14. will upvote. thank you in advance! money market fund...

Q:

You are considering investing in three different assets. The first is a stock, the second is a long-term government bond and the third is a T-bill money market fund that yields a sure rate of 5%. The...

Q:

Use the following information to answer parts A-D: Expected Return Standard Deviation Bond Fund 8% 5% Stock Fund 16% 13% Expected return Standard deviation Bond fund 8% 5% Stock fund 16% 13% Assume...

Q:

The probability distribution of the risky funds is as follow: Expected return Standard deviation Stock Fund 20% 30% Bond Fund 12 15 Correlation between the fund return is 0.1. What investment...

Q:

Assets Expected Return Standard Deviation Stock A 17% 23% Stock B 23% 45% The correlation coefficient between the returns of the stock fund and the bond fund is 0.35. The return on the risk-free...

Q:

Please show work (35 points total) Assets Expected Return Standard Deviation Stock A 17% 23% Stock B 23% 45% A. The correlation coefficient between the returns of the stock fund and the bond fund is...

Q:

A researcher is interested in comparing the response times of two different cab companies. Companies A and B were each called at 50 randomly selected times. The calls to company A were independently...

Q:

What are the journal entery for following and prepare Financial Statements and Trial balance On Jan 1st 2019, Ginvold Co. began operating a subsidiary in on January 1, 2019 by acquiring all of the...

Q:

A simple discount note results in a higher interest rate ( effective rate ) than a simple interest note. True or False 0 0 3 1 5 8

Q:

Skills necessary for success in marketing include Multiple select question. analytical thinking advertising industry experience infallibility ability to work with others

Q:

Know how senior managers can increase the value and strengthen the effectiveness of human resources

Q:

Describe how you believe the business of locating, hiring, and maintaining employees was accomplished before the establishment of an employment office. List the activities that were probably...

Q:

Understand the reasons for engaging consultants