Question
In: Finance
Shares A and B have the following returns: Stock A Stock B 1 0.08 0.06 2...
Shares A and B have the following returns:
|
Stock A |
Stock B |
||
|
1 |
0.08 |
0.06 |
|
|
2 |
0.06 |
0.04 |
|
|
3 |
0.12 |
0.05 |
|
|
4 |
−0.05 |
0.03 |
|
|
5 |
0.09 |
−0.02 |
a. What are the expected returns of the two shares?
b. What are the standard deviations of the returns of the two shares?
c. If their correlation is
0.44,
what is the expected return and standard deviation of a portfolio of
52%
share A and
48%
share B?
Solutions
Expert Solution
calculations-
| Note- | ||
| Average Return = Sum of returns/ No. of years | ||
| Variance = Sum of (Return - Avg return )^2 /(No. of years -1) | ||
| Standard deviation = Squareroot (Variance) | ||
Please upvote if the ans is helpful.In case of doubt,do comment.Thanks.
jeff jeffy answered 3 years agoRelated Solutions
Stocks A and B have the following returns: Stock A Stock B 1 0.08 0.06 2...
Stocks A and B have the following returns:
Stock A
Stock B
1
0.08
0.06
2
0.05
0.01
3
0.12
0.06
4
−0.04
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5
0.08
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Stocks A and B have the following returns: Stock A Stock B 1 0.11 0.06 2...
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3
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0.08
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(Round to three decimal places.)
a. What are the expected returns of the two stocks?
b. What are the standard deviations of the returns of the two
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c. If their correlation is 0.45, what is the expected return
and standard deviation of a portfolio of 70%
stock A and 30% stock B?...
Shares A and B have the following returns: Stock A Stock B 1 0.09 0.05 2...
Shares A and B have the following returns:
Stock A
Stock B
1
0.09
0.05
2
0.07
0.03
3
0.13
0.04
4
−0.02
0.01
5
0.07
−0.02
a. What are the expected returns of the two shares?
b. What are the standard deviations of the returns of the two
shares?
c. If their correlation is 0.44, what is the expected return
and standard deviation of a portfolio of 52% share A and 48%
share B?
a. What are the expected...
Stocks A and B have the following returns: Stock A Stock B 1 0.110.11 0.050.05 2...
Stocks A and B have the following returns:
Stock A
Stock B
1
0.110.11
0.050.05
2
0.070.07
0.030.03
3
0.140.14
0.030.03
4
negative 0.02−0.02
0.010.01
5
0.080.08
negative 0.04−0.04
a. What are the expected returns of the two stocks?
b. What are the standard deviations of the returns of the two
stocks?
c. If their correlation is
0.44
what is the expected return and standard deviation of a
portfolio of
78%
stock A and
22%
stock B?
Stocks A and B have the following returns: Stock A Stock B 1 0.11 ...
Stocks A and B have the following returns:
Stock A
Stock B
1
0.11
0.06
2
0.06
0.04
3
0.15
0.04
4
0.03
0.01
5
0.07
-0.03
a. What are the expected returns of the two
stocks?
b. What are the standard deviations of the
returns of the two stocks?
c. If their correlation is 0.48, what is the
expected return and standard deviation of a portfolio of 56% stock
A and 44%...
Stocks A and B have the following? returns: Stock A Stock B 1 0.11 &nb
Stocks A and B have the following? returns:
Stock
A Stock B
1 0.11
0.05
2
0.06
0.02
3
0.15 0.05
4
-0.04
0.02
5
0.08
-0.04
a. What are the expected returns of ?stock A and Stock B?
b. What are the standard deviations of the returns of stock A
and stock B?
c. If their correlation is 0.43?, what is the expected return
and standard deviation of a portfolio of 55?% stock A and 45?%
stock? B?
1.) Two securities have the following characteristics: E(Ra)= 0.06 0.04 E(Rb)= 0.08 0.10 A) Fill in...
1.) Two securities have the following characteristics:
E(Ra)= 0.06 0.04
E(Rb)= 0.08 0.10
A) Fill in the missing cells in the table.
For each of two correlation cases, corr. = -1 and corr. = 0,
calculate the attainable portfolios' mean and standard deviation
from combining the two assets together using weights in increments
of 25% from 1 to 0. Also, calculate the minimum risk portfolio's
weights, mean and standard deviation for each correlation case.
Assume that the risk free rate...
Stocks A and B have the following historical returns: Year Stock A's returns Stock B's returns...
Stocks A and B have the following historical returns:
Year
Stock A's
returns
Stock B's
returns
2003
−19.00%
−15.50%
2004
34.00%
23.80%
2005
16.00%
29.50%
2006
−0.50%
−6.60%
2007
28.00%
27.30%
(a) Calculate the average rate of return and standard deviation
of returns (as percents) for each stock during the 5-year period.
(Round your standard deviations to two decimal places.)
stock A average rate of return %
standard deviation %
stock B average rate of return %
standard deviation %...
Stock A Stock B 1 0.09 0.06 2 0.05 0.02 3 0.14 0.03 4 -0.03 ...
Stock A Stock B
1 0.09 0.06
2 0.05 0.02
3 0.14 0.03
4 -0.03 0.02
5 0.08 -0.01
a. What are the expected returns of the two stocks?
b. What are the standard deviations of the returns of the two
stocks?
c. If their correlation is 0.44, what are the expected return
and standard deviation of a portfolio of 66% stock A and 34% stock
B?
Calculate the variance of the following returns. Year Return 1 0.17 2 0.06 3 0.1 4...
Calculate the variance of the following
returns.
Year Return
1 0.17
2 0.06
3 0.1
4 0.13
5 0.08
Enter the answer with 4 decimals, e.g. 0.1234.
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