Question: Please answer both, thank you! IBM has a standard deviation of .20 and an expected return of . 10. GM has a standard deviation of

Please answer both, thank you!

IBM has a standard deviation of .20 and an expected return of . 10. GM has a standard deviation of .18 and an expected return of .08. The correlation between the two stocks is .25. Suppose you form a portfolio that includes 45 of the value invested in IBM and .55 is invested in GM? What is the expected return of the portfolio? What is the standard deviation of the portfolio?

Using the data below, plot the returns to Plum & Co., versus the returns on the market (Plum & Co. is the y-axis, market is the x-axis) for each monthly data coordinate. What is a good guess at the beta of Plum & Co.?

Date	Plum & Co Return	Market Return
Jan 2021	6.0%	5.0%
Feb 2021	12.0%	7.0%
March 2021	-10.0%	-5.0%
April 2021	1.5%	1.0%

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!

b. In your audit of Aviary Industries for calendar year 2011, you found several matters that you believe represent possible adjustments to the company's books. These matters are described below....

For simplicity and convenience of calculation, suppose there are only one risk-free asset with a return of 5%, and two risky assets, Stock A and Stock B. Stock A has a standard deviation of 20% and...

I need help with part d, f and g. Everything else is right Neighborhood Insurance sells fire insurance policies to local homeowners. The premium is $340, the probability of a fire is 0.1%, and in the...

Please answer A-D. Thank you! Expected return and standard deviation. Use the following information to answer the questions: a. What is the expected return of each asset? b. What is the variance and...

You have a portfolio with a standard deviation of 20% and an expected return of 20%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have...

you have a portfolio with a standard deviation of 20% and an expected return of 18%. You were considering adding one of the stocks in the following table if after adding the stock you will have 20%...

If the risk-free interest rate in the would the arbitrage strategy be? 3) (15 points) The correlation coefficient between the returns of Stock A and Stock Bis-1. Stock A has a standard deviation of...

Use Exhibit 1 to answer questions 1-3: EXHIBIT 1 Asset Allocation Standard Deviation of Return A B Expected Return 11.5% 8 6. 18% 14 10 1. Investment advisor Yao Shen's estimates the risk aversion...

You have a portfolio with a standard deviation of 20% and an expected return of 19%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have...

You have a portfolio with a standard deviation of 20% and an expected return of 18%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have...

Old Town Co. wholesales bathroom fixtures. During the current fiscal year, Old Town Co. received the following notes: Instructions 1. Determine for each note (a) the due date and (b) the amount of...

If you are given: a current yield to maturity on 30 year treasury bonds (eg 2%), a current yield to maturity on 3 month treasury bills (eg 1%), most recent one year return on the S&P 500 (eg 5%),...

CX Enterprises has the following expected dividends: \ ( \ $ 1 . 0 1 \ ) in one year, \ ( \ $ 1 . 1 6 \ ) in two years, and \ ( \ $ 1 . 3 1 \ ) in three years. After that, its dividends are expected...

10) For a bond that pays cash interest (i.e., not a zero coupon bond), YTM is (a) always equal to the coupon rate (b) always equal to the current yield (c) is always less than the coupon rate (d) can...

Distinguish between primary and secondary information sources. Give an example of each. (Objective 3)

Mary Lous Family Cooking has been operating for 25 years. Several chain restaurants have moved into the area resulting in a highly competitive market.Mary Lous currently owes an $18,750 balance for...

While working as part of a research team, one of your coworkers tells you that failing to cite sources doesnt constitute plagiarism if youre writing an internal report. Do you agree or disagree? Why?...