Question

In: Economics

Scenario 5 A company has a portfolio of investments in stocks and in bonds. The total...

Scenario 5

A company has a portfolio of investments in stocks and in bonds. The total investment is $8 million of which $2 million is invested in stocks. (Go to four decimals as needed.)

Stocks

Bonds

Portfolio Weight

a

b

Expected/Mean Return

9.25%

6.55%

Variance

328.1875

61.9475

Covariance

-135.3375

What is the portfolio weight for the bonds?                                                

Question 22

Refer to Scenario 5.

What is the expected portfolio return? Calculate as a percentage.

Question 23

Refer to Scenario 5.

What is the variance of the portfolio return? Calculate as a percentage.

Question 24

Refer to Scenario 5.

What is the standard deviation of the portfolio return? Calculate as a percentage.

Solutions

Expert Solution

complete answer is given in picture. Give it a thumbs up Thank you

Rahul Sunny answered 3 years ago
Next > < Previous

Related Solutions

Jay is reviewing his portfolio of​ investments, which include certain stocks and bonds. He has a...
Jay is reviewing his portfolio of​ investments, which include certain stocks and bonds. He has a large amount tied up in U.S. Treasury bills paying 2.9% . He is considering moving some of his funds from the​ T-bills into a stock. The stock has a beta of 1.21. If Jay expects a return of 14.3% from the stock​ (a little better than the current market return of 12.1%), should he buy the stock or leave his funds in the​ T-bill?
A portfolio has $200,000 invested in bonds and $300,000 invested in stocks. The bonds have an...
A portfolio has $200,000 invested in bonds and $300,000 invested in stocks. The bonds have an expected return of 8% a with a standard deviation of 12%. The stocks have an expected return of 12% with a standard deviation of 20%. The correlation between the stocks and bonds is 0.40. 1. What is the portfolio weight for the bonds? 2. What is the portfolio weight for the stocks? 3. What is the expected return for the portfolio? (Treat the expected...
A portfolio has $100,000 invested in bonds and $400,000 invested in stocks. The bonds have an...
A portfolio has $100,000 invested in bonds and $400,000 invested in stocks. The bonds have an expected return of 0.09 a with a standard deviation of 0.07. The stocks have an expected return of 0.14 with a standard deviation of 0.25. The correlation between the stocks and bonds is 0.40. (Round to 3 decimals if necessary) What is the portfolio weight for the bonds? Flag this Question Question 8 Refer to Scenario 3. What is the portfolio weight for the...
Consider the following scenario analysis:    Rate of Return Scenario Probability Stocks Bonds Recession 0.2 -5...
Consider the following scenario analysis:    Rate of Return Scenario Probability Stocks Bonds Recession 0.2 -5 % 17 % Normal economy 0.6 18 11 Boom 0.2 24 4 Assume a portfolio with weights of 0.60 in stocks and 0.40 in bonds. a. What is the rate of return on the portfolio in each scenario? (Enter your answer as a percent rounded to 1 decimal place.) b. What are the expected rate of return and standard deviation of the portfolio? (Do...
Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.3 -5 %...
Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.3 -5 % 14 % Normal economy 0.6 15 10 Boom 0.1 24 5 Assume a portfolio with weights of 0.60 in stocks and 0.40 in bonds. What is the rate of return on the portfolio in each scenario? (Enter your answer as a percent rounded to 1 decimal place.) b. What are the expected rate of return and standard deviation of the portfolio? (Do not round...
Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.2 -5 %...
Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.2 -5 % 13 % Normal economy 0.5 14 9 Boom 0.3 23 4 Assume a portfolio with weights of 0.60 in stocks and 0.40 in bonds. a.What is rate of return on the portfolio in each scenario? (Enter your answer as a percent rounded to 1 decimal place.) Recession rate of return:?% Normal Economy rate of return:?% Boom rate of return:?% b. What are the expected...
Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.20 -5 %...
Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.20 -5 % 14 % Normal economy 0.60 15 8 Boom 0.20 25 4 Assume a portfolio with weights of .60 in stocks and .40 in bonds. a. What is the rate of return on the portfolio in each scenario? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) b. What are the expected rate of return and standard deviation...
Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.20 –5 %...
Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.20 –5 % 19 % Normal economy 0.60 20 10 Boom 0.20 27 4 a. Calculate the expected rate of return and standard deviation for each investment. (Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place.) Expected Rate of Return Standard Deviation Stocks ?% ?% Bonds ?% ?%
Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.20 –5 %...
Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.20 –5 % 17 % Normal economy 0.50 20 9 Boom 0.30 29 7 a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms? No Yes b. Calculate the expected rate of return and standard deviation for each investment. (Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place.)
You have a portfolio of two stocks that has a total value of $32,000. The portfolio is 44 percent
You have a portfolio of two stocks that has a total value of $32,000. The portfolio is 44 percent invested in Stock J. If you own 205 shares of Stock K, what is Stock K's share price?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT