Question: Given the following expectations for return, risk and correlation: E (r) a psb 0.22 0.31 -0.25 Portfolio S Portfolio B 0.1 0.06 Risk-free 0.055

Given the following expectations for return, risk and correlation: E (r) a

Given the following expectations for return, risk and correlation: E (r) a psb 0.22 0.31 -0.25 Portfolio S Portfolio B 0.1 0.06 Risk-free 0.055 An optimal portfolio of S and B has been calculated to contain 0.5 stocks, i.e. portfolio S (out of a possible 100% or 1.0). What would be the standard deviation of the optimal portfolio from S and B? O 0.1706 O 0.1590 O 0.1774 O 0.1639 O 0.1503

Step by Step Solution

★★★★★

3.35 Rating (142 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Answer ANSWER 1 a 1503 Portfolio standard deviation W1 2 x Std dev1 2 W2 2 x Std dev2 2 2 ... View full answer

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 Accounting Questions!

Given the following expectations for return, risk and correlation, what is the covariance of returns for portfolios of S and B? [Calculate this to 5 decimal points] Portfolio S Portfolio B 0.08 0.14...

The Vargas Company had the following expectations for the year: Budgeted results for the year were: Total market for the product Vargass budgeted sales Variable costs per unit 175,900 units...

In developing a BCG or IE Matrix, what would be a good surrogate for revenues for 1) Target Corp., 2) Burger King, 3) Bank of America, and 4) Spirit Airlines.

A forestry firm fells trees on provincially-owned land. The trees, once felled, are sold to a sawmill that transforms the trunks into planks and posts. The sawmill bought capital goods from a heavy...

Given the following expectations for return, risk and correlation: E (r) o psb 0.22 0.31 Portfolio S -0.25 Portfolio B 0.1 0.06 Risk-free 0.055 An optimal portfolio of S and B has been calculated to...

Markowitz's main contribution to portfolio theory is: that risk is a function of credit, liquidity and market factors insight about the relative importance of variance and covariance in determining...

Given the following expectations for return, risk and correlation: E (r) o psb Portfolio S 0.22 0.17 -0.25 Portfolio B 0.15 0.06 Risk-free 0.075 An optimal portfolio of S and B has been calculated to...

Given the following expectations for return, risk and correlation: E(r) o psb Portfolios 0.22 0.17 -0.25 Portfolio B 0.15 0.06 Risk-free 0.075 An optimal portfolio of S and B has been calculated to...

TWO PART QUESTION Part 2 -- The Optimal Portfolio -- a. is the combination of assets along the Efficent Frontier expected to deliver the highest returns for the lowest risk b. is the combination of...

Question 3 The management of Healthy Fish Ltd plans to purchase a logistics company. As a result, the due diligence team obtained the following loss data from the records of the target company....

Ami stops to fill her car with gas at Local Gas Station. Unbeknownst to Ami, Amari, one of the employees at the store, has placed a device on the pump that allows her to steal the credit card number....

Design a custom date function that showcases your coding abilities and originality. The function should take 3 inputs: the output of the Get-Date cmdlet, and two additional parameters. It must...

5. Find the tension in the cable and the force exerted by the hinge on the beam. The beam has mass 50.0 kg and length 7.00m. (754N; 492N at 10.2 below hzntl) 80.0 30.0 7.00 m 2.00 m

The ethical principle of applies to the security of payroll records. Multiple Choice Professional Competence and Due Care Integrity Confidentiality Objectivity and Independence

QS 1-7 (Algo) Applying the accounting equation LO A1 a. Total assets of Charter Company equal $730,000 and its equity is $435,000. What is the amount of its liabilities? b. Total assets of Martin...

Write in c++ and has to be used to gtest. Problem 5: Write a function named as mutliplyBy2AndSum that takes array of type double and its size of type integer as function parameters. You are required...

Ex. (17): the vector field F = x i-zj + yz k is defined over the volume of the cuboid given by 0x a,0 y b, 0zc, enclosing the surface S. Evaluate the surface integral ff, F. ds?

Tree-ring dates were used extensively in archaeological studies at Burnt Mesa Pueblo (Bandelier Archaeological Excavation Project: Summer 1989 Excavations at Burnt Mesa Pueblo, edited by Kohler,...

Suppose you are assigned the number 1, and the other students in your statistics class call out consecutive numbers until each person in the class has his or her own number. Explain how you could get...

For mallard ducks and Canada geese, what percentage of nests are successful (at least one offspring survives)? Studies in Montana, Illinois, Wyoming, Utah, and California gave the following...

Suppose a body and paint shop Ira s to work on four cars (A, B, C!, and D) of a car rental agency. The manager estimated the job times required (in hours) as follows: Tire body and paint shop each...

What is shop-floor control? Name two tools used in shop-floor control.

Briefly describe each of these priority rules , discuss the advantages and disadvantages of each rule, and suggest a scenario under which each rule may be appropriate: a. FCFS b. SPT c. EDD d. MST e....