Question: You are planning to construct a portfolio containing two stocks, X and Y.Stock X has an expected return of 1.3% and has a standard deviation

You are planning to construct a portfolio containing two stocks, X and Y.Stock X has an expected return of 1.3% and has a standard deviation of 5.7%.Stock Y has an expected return of 5.9% and has a standard deviation of 8.4%.The covariance between the two stocks is 0.0344736.What proportion of your funds should you invest in Stock X to minimise the variance of your portfolio (as a percentage to zero decimal places)?

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!

Southwestern University (SWU), a large state college in Stephenville, Texas, enrolls close to 20,000 students. The school is a dominant force in the small city, with more students during fall and...

Marigold Company's record of transactions concerning part X for the month of April was as follows. Purchases Sales April 1 (balance on hand) 230 @ $5.40 April 5 430 4 530 @ 5.50 12 330 11 430 @ 5.70...

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...

Complete tabs 7.2, 7.5, 7.15, 7.19, and 7.24 in the attached Chapter 7 Excel spreadsheet. Complete tabs 8.1, 8.6, 8.9, 8.11, and 8.26 in the attached Chapter 8 Excel spreadsheet. An EXAMPLE tab is...

You construct a portfolio containing two stocks, X and Y.You invest 70% of your funds in Stock X and the remainder in Stock Y.Stock X has an expected return of 7.4% and has a standard deviation of...

Question 4 A stock has the following prices at the end of each of the following 5 years. What is the geometric average return over the period? Incorrect Mark 0.00 out Year Price of 1.00 Flag 20x1...

explain the calculation. thanks u You construct a portfolio containing two stocks, X and Y. You invest 50% of your funds in Stock X and the remainder in Stock Y. Stock X has an expected return of...

You construct a portfolio containing two stocks, X and Y.You invest 69% of your funds in Stock X and the remainder in Stock Y.Stock X has an expected return of 7.8% and has a standard deviation of...

You construct a portfolio containing two stocks, X and Y.You invest 76% of your funds in Stock X and the remainder in Stock Y.Stock X has an expected return of 9.9% and has a standard deviation of...

You construct a portfolio containing two stocks, X and Y. You invest 90% of your funds in Stock X and the remainder in Stock Y. Stock X has an expected return of 8.0% and has a standard deviation of...

correct answer? You construct a portfolio containing two stocks, X and Y You invest 60% of your funds in Stock X and the remainder in Stock Stock X has an expected return of 70% and has a standard...

2. On January 1, 2020, ABC Company acquired 10% of the outstanding ordinary shares of CBA Company for P4,000,000. The investment was appropriately accounted for under cost method. On January 1, 2021,...

Fifteen-year-old Edward Garner was killed by Memphis Police Department Officer Elton Hymon when Garner fled the scene of a suspected burglary. His father, Cleamtree Garner, sued the Department under...

DP1.5 A large, braced robot arm for welding large struc tures is shown in Figure DP1.5. Sketch the block diagram of a closed-loop feedback control system for accurately controlling the location of...

Calculate the circuit with mesh method and complex numbers. Solve the circuit above with the complex numbers using the perimeter method S.2. Aadaki devreyi evre yntemini kullanarak kompleks saylarla...

2) Explain life-cycle and permenant income theories briefly.

A student attempted to identify an unknown compound by the method described in this experiment. When he heated a sample weighing 1.031 g the mass went down to 0.688 g. When the product was converted...

QUESTION 19 An analog signal x(t)- 6 35cos(2n"80ot) is quantized at 6 2 mV step size resolution What should be the number of bits Not yet answered used in the A/D conversion? Marked out of 1 0o P...

Megha bought a book for ruppees 225/2 from a shop. She gave 500 ruppees note to the shopkeeper and got the balance back.But she realised that the shopkeeper had given her ruppees 72 extra.Megha...

Design a minimum-mass symmetric three-bar truss (the area of member 1 and that of member 3 are the same) to support a load P, as was shown in Fig. 2.9. The following notation may be used: Pu = P cos...

=+18.13. Prove for distribution functions F that [ __ (F(x +c) -F(x)) dx =c.

=+ (b) Show that xy/(x2 + y2)2 is not integrable over the square [(x, y): |x|, lyl 1] even though the iterated integrals exist and are equal.

=+18.12. Prove (18.16) for the case in which all the functions are continuous by differentiating with respect to the upper limit of integration.