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 2 years agoRelated Solutions
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Stocks A and B have the following? returns: Stock A Stock B 1 0.11 &nb
Stocks A and B have the following? returns:
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A Stock B
1 0.11
0.05
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0.02
3
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4
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0.02
5
0.08
-0.04
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and stock B?
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Assume that the risk free rate...
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Stock B's Returns,
rB
2011
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2012
27.75
19.70
2013
10.00
37.00
2014
- 5.00
- 9.90
2015
23.75
2.90
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%_________
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2014
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2015
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24.10
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30.90
2017
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2018
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