There are 2 assets. Asset 1: Expected return 7.5%, standard deviation 9% Asset 2: Expected return 11%,

Fantastic news! We've Found the answer you've been seeking!

Question:

There are 2 assets.

Asset 1: Expected return 7.5%, standard deviation 9%

Asset 2: Expected return 11%, standard deviation 12%, correlation with asset 1 is 0.4

You hold 30% of your portfolio in asset 1 and 70% in asset 2.

a) What is the expected return of your portfolio?

b) What is the covariance between assets 1 and 2?

c) What is the standard deviation of your portfolio?

Related Book For answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

Posted Date: Apr 03, 2024 06:43 AM

See More Questions

A retailer that makes credit card sales: Select one: A. Absorbs any losses on uncollectible credit card accounts B. Is charged a fee ranging from 1% to 5% of the amount of each credit card sale C....
From the following cash flow diagram, find the value of C that will establish economic equivalence between the deposit series and the withdrawal series at an interest rate of 9% compounded annually....
In Exercises use the Limit Comparison Test to determine the convergence or divergence of the series. 0 1 2 n=11n+1
What is an 'executory contract'? How does this affect the dates on which revenue is recognised under the Conceptual Framework?
Which of the following is a valid lambda expression? A. r -> {return 1==2} B. (q) -> true C. (x,y) -> {int test; return test>0;} D. a,b -> true E. None of the above
Describe the functional family approach as it would apply to resolution of a dispute between two former cohabitants.
Sutcliffe Banton, dba Nemard Construction, furnished labor and materials (valued at $162,895) for improving Vicky Deafeamkpors New York City residential property. She paid only $41,718, leaving...
Name four characteristics of Force?
Now consider the following set of reactions: 2NO2?2NO + O2 ,? H =109 kJ/mol N2O4?2NO + O2 ,? H =172 kJ/mol Part A The equations given in the problem introduction can be addedtogether to give the...
What is an equitable adjustment? The appropriate formula for pricing such an equitable adjustment is the difference between what it would have reasonably cost to perform the work as originally...
A whiskey distillery emits air with 400 ppm ethanol. The air flows out several roof vents at a total flow rate of 2000 m/min (at 35 C and 1 atm). The distillery is required to collect all the vented...
Voyager, Inc issued callable bonds paying a semi-annual coupon at a coupon rate of 5% that can be called after ten years. The maturity period for these bonds is 30 years, and the bonds were issued...
Kool DJ Services have budget constraints and have to choose from one of the two projects identified as below: Project 1: Renovate the studio, which will have an increase in revenue by $ 120,000...
The WeLikeSeaTurtles Company paid out $ 4 million in dividends in 2021. At the end of 2020, the balance sheet showed retained earnings of $101 million, and $115 million at the end of 2021. What was...
An 8" ID pipe carries air at 80.0 ft/sec, 21.5 psi absolute and 80F. How many pounds of air are flowing? The 8" pipe reduces to a 4" ID pipe and the pressure and temperature in the 4" pipe are 19.0...
The Pletcher Transportation Company uses a responsibility reporting system to measure the performance of its three investment centers: Planes, Taxis, and Limos. Segment performance is measured using...
As an instructor, what can you do to help participants retain what they are learning?
Why does training sometimes fail?
What are the three major components in quality training recommended by Juran?

There are 2 assets. Asset 1: Expected return 7.5%, standard deviation 9% Asset 2: Expected return 11%,

Question:

Expert Answer:

To calculate the expected return covariance and standard deviation of the portfolio we can use the f... View the full answer

Income Tax Fundamentals 2013

Students also viewed these finance questions