Question: The expected returns in the U.S. are 7% and 10% in Indonesia. The historical standard deviation of the U.S. market is 5%, and the historical

The expected returns in the U.S. are 7% and 10% in Indonesia. The historical standard deviation of the U.S. market is 5%, and the historical standard deviation of the Indonesian market is 11%. The covariance between the US and the Indonesian market is .002. What is the correlation between the US and the Indonesian markets? What are your expected returns and standard deviations if you diversify your US portfolio by moving 20% into Indonesia? What are the advantages and disadvantages to this strategy

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!

(a) Determine the average daily usage of each activity. (Round answers to 2 decimal places, e.g. 15.25.) Average daily usage of activities Measuring Mixing Batter Baking

5) The expected returns in the U.S. are 7% and 10% in Indonesia. The historical standard deviation of the U.S. market is 5%, and the historical standard deviation of the Indonesian market is 11%. The...

The expected returns in the U.S. are 7% and 10% in Indonesia. The historical standard deviation of the U.S. market is 5%, and the historical standard deviation of the Indonesian market is 11%. The...

1-Samer plans to invest in Stock A and Stock B. The correlation between A and B is 0.6. The expected returns are 15% and 18% for stocks A and B, respectively. The standard deviation are 0.111 and...

Samer plans to invest in Stock A and Stock B. The correlation between A and B is 0.6. The expected returns are 15% and 18% for stocks A and B, respectively. The standard deviation are 0.111 and 0.235...

Finance question set - risk and return Looking for help with these problems, thanks! HW4 I. Risk & Return Queston 1 Consider the following information on the economy and specific stocks and bonds:...

QUESTION THREE - PLEASE ANSWER PART B Part A Year ($mm) 1 2 3 4 5 Revenue $ - $ 1.5 $ 8.0 $ 35.0 $ 54.0 Development Expenses $ 1.2 $ 0.8 $ 0.6 $ 1.5 $ 2.5 Marketing Expenses $ 0.4 $ 2.0 $ 3.0 $ 7.0 $...

QUESTION THREE Part A Year ($mm) 1 2 3 4 5 Revenue $ - $ 1.5 $ 8.0 $ 35.0 $ 54.0 Development Expenses $ 1.2 $ 0.8 $ 0.6 $ 1.5 $ 2.5 Marketing Expenses $ 0.4 $ 2.0 $ 3.0 $ 7.0 $ 12.0 Content Expenses...

Question 6 Not yet answered Marked out of 1.00 P Flag question Question 7 Not yet answered Marked out of 1.00 P Flag question Question 8 Not yet answered. Marked out of 1.00 Flag question Question 9...

2 . Suppose that you are considering investing in three mutual funds. The first is a U . S . stock fund, the second is an emerging market stock index fund, and the third is a T - bill money market...

Here is one sample from the before data. Hit to get a new sample. Before 25 20 15 Samples from the after data mean is found. This is repea sampling distribution. The n mean equal to the mean of t...

Suppose there are three types of consumers who attend concerts at your universitys performing arts center: students, staff, and faculty. Each of these groups has a different willingness to pay for...

A construction company is planning to undertake a new project with an expected profit of $300,000. However, the project has a 30% chance of experiencing a cost overrun of $100,000 due to unforeseen...

When there is an excess capacity, it makes sense to accept a one - time - only special order for less than the current selling price if _ _ _ _ _ _ _ _ . Question 1 9 options: 1 ) incremental...

5. Develop a scenario comparing two PH programs and involving the use of a CBA.

6. How did American Waters data warehouse improve operations and management decision making? American Water, founded in 1886, is the largest public water utility in the United States. Headquartered...

4. How did implementing a data warehouse help American Water move toward a more centralized organization? American Water, founded in 1886, is the largest public water utility in the United States....

6-8 Iko Instruments Group, a global supplier of measurement, analytical, and monitoring instruments and services based in the Netherlands, had a new data warehouse designed to analyze customer...