Question: Given the following: SP500 return is 2%, variance is 5% Bitcoin return is 2%, variance is 10% the SP500 and Bitcoin have a correlation measured

Given the following: SP500 return is 2%, variance is 5% Bitcoin

Given the following: SP500 return is 2%, variance is 5% Bitcoin return is 2%, variance is 10% the SP500 and Bitcoin have a correlation measured 0.45 Since there is a positive correlation between SP500 and Bitcoin, we should not be able construct a portfolio of these 2 assets and expect to reduce risk. True O False

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!

Given the following: SP500 return is 2%, variance is 5% WMT return is 3%, variance is 11% the SP500 and Bitcoin have a correlation measured 0.45 Since there is a positive correlation between SP500...

Given the following: SP500 return is 2%, variance is 5% Adobe (ADBE) return is 3%, variance is 11% the SP500 and Bitcoin have a correlation measured 0.45 Since there is a positive correlation between...

Question 2 Given the following risk return space. How could we achieve the safe portfolio 0.20 Asset A 0.15 angency 0.10 Global min 900 Asset 0.00 0.0 0.1 02 03 0 -10% invested in the tangency...

You are given three assets A, B, C. Expected return for three assets are 10%, 7%, and 2%, respectively. 2.1) Assume the volatility of three assets, A, B, and C (risk-free asset), are 10%, 5%, and 0%....

Justify your answers. Show your calculations. USE 5 DECIMAL POINTS AT EVERY STEP. Label your graphs cleanly. Identify the axes, the curves, etc... 1. 55 POINTS You may use excel to do this problem....

Only need the excel section completed. I will do the written report stuff. Model is the format I want it complete in. Thanks Date 6/1/2010 7/1/2010 8/1/2010 9/1/2010 10/1/2010 11/1/2010 12/1/2010...

Hi again, I was hoping you can help with this investment management assignment. I am attaching the word document. It is 4 problems about asset management. Thank you for your help! Fin 6310 1. Assume...

Please, I need help with the calculations for the following 25 problems in the "final" tab of the workbook before 9pm CST. FINC 340 Quizzes 1 2 Derivatives can be strictly defined as Financial...

26. For this problem assume that it is possible to borrow and lend risklessly at a rate of 4%. Also assume that the expected return on the tangency (i.e., the optimal) portfolio composed only of...

Location Income ($1,000) Urban 27 Rural 25 Suburban 25 Suburban 26 Rural 30 Urban 29 Rural 33 Urban 30 Suburban 32 Urban 34 Urban 35 Urban 40 Rural 30 Rural 33 Urban 42 Suburban 32 Urban 43 Urban 43...

Use Taylor's method of order two to approximate the solution for each of the following initial-value problems. a. y' = y/t (y/t)2, 1 t 1.2, y(1) = 1, with h = 0.1 b. y' = sin t + et, 0 t 1, y(0) =...

Prove that similarities form a group.

Which of the following does not need to be disclosed for each reportable segment if it is included in the enterprise's segment profit or loss reported to the chief operating decision maker? A ....

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".