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.


Related 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    0.03 5 0.08 −0.02    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 is0.45​, what is the expected return and standard deviation of a portfolio of 62​%stock A and 38​%stock​ B?
Stocks A and B have the following​ returns: Stock A Stock B 1 0.11 0.06 2...
Stocks A and B have the following​ returns: Stock A Stock B 1 0.11 0.06 2 0.07 0.04 3 0.13 0.03 4 −0.01    0.02 5 0.08 −0.03    ​(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​ stocks? 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...
   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?
Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's...
Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's Returns, rB 2011 - 22.40% - 15.60% 2012 27.75 19.70 2013 10.00 37.00 2014 - 5.00 - 9.90 2015 23.75 2.90 a. Calculate the average rate of return for stock A during the period 2011 through 2015. Round your answer to two decimal places. %_________ Calculate the average rate of return for stock B during the period 2011 through 2015. Round your answer to...
Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's...
Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's Returns, rB 2014 (16.20 %) (13.00 %) 2015 33.50 24.10 2016 15.00 30.90 2017 (1.75 ) (9.60 ) 2018 27.25 25.40 Calculate the average rate of return for each stock during the period 2014 through 2018. Round your answers to two decimal places. Stock A:   % Stock B:   % Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B....
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT