Suppose two assets have perfect negative correlation. Show that the standard deviation on a portfolio of the
Question:
Suppose two assets have perfect negative correlation. Show that the standard deviation on a portfolio of the two assets is simply:
(P = ± (xA × (A – xB × (B)
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 82% (17 reviews)
Look at x A A x B B 2 whic...View the full answer
Answered By
Lamya S
Highly creative, resourceful and dedicated High School Teacher with a good fluency in English (IELTS- 7.5 band scorer) and an excellent record of successful classroom presentations.
I have more than 2 years experience in tutoring students especially by using my note making strategies.
Especially adept at teaching methods of business functions and management through a positive, and flexible teaching style with the willingness to work beyond the call of duty.
Committed to ongoing professional development and spreading the knowledge within myself to the blooming ones to make them fly with a colorful wing of future.
I do always believe that more than being a teacher who teaches students subjects,...i rather want to be a teacher who wants to teach students how to love learning..
Subjects i handle :
Business studies
Management studies
Operations Management
Organisational Behaviour
Change Management
Research Methodology
Strategy Management
Economics
Human Resource Management
Performance Management
Training
International Business
Business Ethics
Business Communication
Things you can expect from me :
- A clear cut answer
- A detailed conceptual way of explanation
- Simplified answer form of complex topics
- Diagrams and examples filled answers
4.90+
46+ Reviews
54+ Question Solved
Related Book For
Fundamentals of Investments Valuation and Management
ISBN: 978-0077283292
5th edition
Authors: Bradford D. Jordan, Thomas W. Miller
Question Posted:
Students also viewed these Finance questions
-
A. Prepare for the City of Claire General Fund a statement of revenues, expenditures, and changes in fund balance for the year ended December 31, 2021. B. Prepare a Balance Sheet at December 31, 2021...
-
Suppose two assets have perfect positive correlation. Show that the standard deviation on a portfolio of the two assets is simply: (P = xA (A + xB (B
-
Suppose two assets have zero correlation and the same standard deviation. What is true about the minimum variance portfolio?
-
Upon graduation from high school, John Abel immediately accepted a job as an electrician's assistant for a large local electrical repair company. After three years of hard work, John received an...
-
In Problems a-b complete the squares to find the center and ra-dius of the sphere whose equation is given. a. x2 + y2 + z2 - 12x + 14y - 8z + 1 = 0 b. x2 - y2 + z2 + 2x - 6y - 10z + 34 = 0
-
When does product undercosting or overcosting occur?
-
As shown in Fig. 5-7p, a positive lens with focal length \(f\) is placed in contact with a pinhole screen in a Young's experiment. The lens and pinhole plane are at distance \(z_{1}\) from the source...
-
Nations Trust is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $ 380,000 and each with an eight-year life and expected total net cash flows of...
-
Discuss the significance of sustainable agriculture practices in achieving food security and environmental sustainability, focusing on techniques such as organic farming, agroecology, precision...
-
The value of the cumulative standardized normal distribution at Z is 0.8770. The value of Z is ?
-
You are going to invest in Asset J and Asset S. Asset J has an expected return of 14 percent and a standard deviation of 49 percent. Asset S has an expected return of 10 percent and a standard...
-
Using the result in Problem 23, show that whenever two assets have perfect negative correlation it is possible to find a portfolio with a zero standard deviation. What are the portfolio weights?
-
Describe the various models of cultural differences.
-
Consider the Vertex Coloring Problem in which we assign different colors to the adjacent vertices on a given graph G = (V, E). The objective is to color the vertices of the graph using minimum number...
-
Designing public policy is often a difficult task. Suppose that the government imposes an extra tax on gasoline of $0.50 per gallon sold. The goal of this policy is for people to drive less thereby...
-
Description You have been asked to draft an Employment Contract for a Marketing Specialist role at XBA Marketing Solutions Inc. (hereinafter "XBA"), a small company which assists clients in marketing...
-
Moses and Co. Market Wholefoods is an Australian-based exclusive retailer of Tofutti Brands's dairy-free products. It operates at capacity and decides to apply ABC analysis to the three main Tofutti...
-
A single error correcting code, Long(6, 3), is designed so that 3 parity check digits are appended to the end of a 3-digit input, using GF(7). The parity check matrix H is given by 1 1 1 H = 1 2 3 1...
-
A professor gives five exams. Two students' scores have the same mean, although one student did better on all the tests except one. Give an example of such scores.
-
On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cashflows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit...
-
Check properties of Marshallian demand functions which are optimal solutions to consumption utility maximization problems of Exercise 6. Check properties of the corresponding indirect utility...
-
What is the probability that a normal random variable is less than one standard deviation below its mean?
-
What are the probabilities that a normal random variable is less than n standard deviations below its mean for values of n equal to 1.645, 1.96, 2.326?
-
The probabilities that a normal random variable X is less than various values of x are 5 percent, 2.5 percent, and 1 percent. What are these values of x?
-
Marea's Cakes sells its cakes for $30 each. Ingredients cost Marea on average $10 per cake and she pays her baker $10 per cake. For the upcoming year, Marea's fixed costs will be $50,000 and she...
-
The statement of cash flow consists of three main activities, as follows: Operating Investing Financing Each section provides the reader with details on where the cash came from and where the cash...
-
How would i calculate the desired ROI per unit based on this information: $65Per Unit Direct Materials $48.00Per Unit Direct Labour $16.00Per Unit Variable Manufacturing Overhead $12.00Per Unit...
Study smarter with the SolutionInn App