Portfolio Variance Outcomes Boom Normal Bust Probability(p) 0.2 0.5 0.3 rx 40% 26% -10% Wx= E(rp)...
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Portfolio Variance Outcomes Boom Normal Bust Probability(p) 0.2 0.5 0.3 rx 40% 26% -10% Wx= E(rp) = W₂E(r.) + W,E(r.) ry 50% 34% -20% E(r) = 18%, E(ry) = 21% ■ Suppose the current market prices of stocks X and Y are $20 and $50, respectively. You plan to purchase 20,000 shares of X and 12,000 shares of Y. Corr(r,,ry) is estimated to be 20%. Wy= Portfolio Variance Outcomes Boom Normal Bust Probability(p) 0.2 0.5 0.3 rx 40% 26% -10% Wx= E(rp) = W₂E(r.) + W,E(r.) ry 50% 34% -20% E(r) = 18%, E(ry) = 21% ■ Suppose the current market prices of stocks X and Y are $20 and $50, respectively. You plan to purchase 20,000 shares of X and 12,000 shares of Y. Corr(r,,ry) is estimated to be 20%. Wy=
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Answer rating: 100% (QA)
ANS WER W x 20 000 32 000 0 625 W y 12 000 32 000 0 375 E r p 0 625 18 0 375 21 19 125 EX PL AN ... View the full answer
Related Book For
Quantitative Analysis for Management
ISBN: 978-0132149112
11th Edition
Authors: Barry render, Ralph m. stair, Michael e. Hanna
Posted Date:
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