Question: You create a two - stock portfolio based on the information below. Dotery and Flamz have a correlation of 0 . 8 . Stock Return

You create a two-stock portfolio based on the information below. Dotery and Flamz have a correlation of 0.8.
Stock Return Std. Dev. Shares Price
Dotery 16%20%400 $ 12.40
Flamz 3%8%350 $ 18.00
What is the standard deviation of the return on your portfolio?

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!

Q:

You create a two-stock portfolio based on the information below. Dotery and Flamz have a correlation of 0.41. Stock Return Std. Dev. Shares Dotery 16% 20% 400 Price $ 12.40 $ 18.00 Flamz 3% 8% 350...

Q:

You create a two-stock portfolio based on the information below. Dotery and Flamz have a correlation of 0.84 What is the standard deviation of the return on your portfolio? Please enter your answer...

Q:

Suppose you have two stocks in a portfolio with the following information: Stock A Stock F E(R) 0.07 0.12 Std dev 0.04 0.08 Proportion 0.4 0.6 34. Calculate the portfolio risk given a correlation...

Q:

Following the Warren Buffett strategy of Buy what you understand, you decide to create a two stock portfolio consisting of Facebook (FB) and Twitter (TWTR) stock. With your graduation present, you...

Q:

Following the Warren Buffett strategy of "Buy what you understand", you decide to create a two stock portfolio consisting of Face book (FB) and Twitter (TWTR) stock. With your graduation present, you...

Q:

Problem 7-13 -2.74 Consider the data contained in the table below, which lists 30 monthly excess returns to two different actively managed stock portfolios (A and B) and three different common risk...

Q:

Hoyt, Inc. has estimated current year sales (in millions) for the next four quarters. Q1 $240Q2 $250 Q3 $205 Q4 $350 ? Sales for the 1st quarter next year are projected to be $230.? Accounts...

Q:

Spreadsheet Problem 26. Markowitz Efficient Frontier (LO4, CFA5) Assume you are evaluating two stocks, Stock A and Stock B. Stock A has an expected return and standard deviation of 10 percent and 25...

Q:

The data files consist of: projdata.xls approx 114K Data loaded into MS-Excel spreadsheet file. This file contains the closing prices of each of fourteen different stock issues for every trading date...

Q:

Excel Determine the average return and the standard deviation of returns for each stock. Use sample statistics (e.g., STDEV.S function). Determine the correlation coefficient and the covariance...

Q:

1. Based on the business philosophies of Amar Bose, how do you think the Bose Corporation goes about analyzing its competition? 2. Which of the texts three approaches to marketing strategy best...

Q:

What are the possible reasons as to why the mainstream media seem to paint unions in a negative light? Or is that just perception?

Q:

The interest earned at the end of the year one along with principal amount becomes the principal amount for which year?

Q:

Give a critical analysis of the merger and acquisition method you would choose based on the case study.

Q:

What strategy for LMD is needed during a recession?

Q:

How can reflection for leaders and managers be implemented?

Q:

360-degree feedback is scary but powerful for leaders and managers. Discuss.