Question
In: Finance
1. Consider two stocks, Stock D, with an expected return of 13 percent and a standard...
1. Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 26 percent, and Stock I, an international company, with an expected return of 16 percent and a standard deviation of 43 percent. The correlation between the two stocks is -0.5. What is the weight of stock D in the minimum variance portfolio? (Do not round intermediate calculations. Round your answers to 4 decimal places.)
2. Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 31 percent, and Stock I, an international company, with an expected return of 16 percent and a standard deviation of 35 percent. The correlation between the two stocks is 0.1. What is the weight of stock D in the minimum variance portfolio? (Do not round intermediate calculations. Round your answers to 4 decimal places.)
Solutions
jeff jeffy answered 2 years agoRelated Solutions
1. Consider two stocks, Stock D, with an expected return of 13 percent and a standard...
1. Consider two stocks, Stock D, with an expected return of 13
percent and a standard deviation of 33 percent, and Stock I, an
international company, with an expected return of 16 percent and a
standard deviation of 40 percent. The correlation between the two
stocks is 0.2. What is the weight of stock D in the minimum
variance portfolio? (Do not round intermediate
calculations. Round your answers to 4 decimal places.)
2. Consider two stocks, Stock D, with an...
Consider two stocks, Stock D, with an expected return of 20 percent and a standard deviation...
Consider two stocks, Stock D, with an expected return of 20
percent and a standard deviation of 35 percent, and Stock I, an
international company, with an expected return of 8 percent and a
standard deviation of 23 percent. The correlation between the two
stocks is −.21. What are the expected return and standard deviation
of the minimum variance portfolio? (Do not round
intermediate calculations. Enter your answer as a percent rounded
to 2 decimal places.)
Consider two stocks, Stock D, with an expected return of 17 percent and a standard deviation...
Consider two stocks, Stock D, with an expected return of 17
percent and a standard deviation of 32 percent, and Stock I, an
international company, with an expected return of 10 percent and a
standard deviation of 20 percent. The correlation between the two
stocks is −.18. What are the expected return and standard deviation
of the minimum variance portfolio? (Do not round
intermediate calculations. Enter your answer as a percent rounded
to 2 decimal places.
Expected return
28.95
%...
Consider two stocks, Stock D, with an expected return of 19 percent and a standard deviation...
Consider two stocks, Stock D, with an expected return of 19
percent and a standard deviation of 34 percent, and Stock I, an
international company, with an expected return of 7 percent and a
standard deviation of 22 percent. The correlation between the two
stocks is −.20. What are the expected return and standard deviation
of the minimum variance portfolio? (Do not round
intermediate calculations. Enter your answer as a percent rounded
to 2 decimal places.)
Expected Return:________%
Standard Deviation:_________%
Consider two stocks, Stock D, with an expected return of 16 percent and a standard deviation of 31 percent, and Stock I
Consider two stocks, Stock D, with an expected return of 16
percent and a standard deviation of 31 percent, and Stock I, an
international company, with an expected return of 9 percent and a
standard deviation of 19 percent. The correlation between the two
stocks is −.17. What are the expected return and standard deviation
of the minimum variance portfolio? (Do not round intermediate
calculations. Enter your answer as a percent rounded to 2 decimal
places.)
What is the Standard deviation ? Consider two stocks, Stock D, with an expected return of...
What is the Standard deviation ? Consider two stocks, Stock D,
with an expected return of 13 percent and a standard deviation of
31 percent, and Stock I, an international company, with an expected
return of 16 percent and a standard deviation of 42 percent. The
correlation between the two stocks is –0.10. What are the expected
return and standard deviation of the minimum variance portfolio?
(Do not round intermediate calculations. Enter your answer as a
percent rounded to 2...
Stock JAY has an expected return of 13 percent and a standard deviation of 75 percent....
Stock JAY has an expected return of 13 percent and a standard
deviation of 75 percent. Stock ELIZABETH has an expected return of
9 percent and a standard deviation of 42 percent. The covariancr
between the two stocks is .07. you invest 1/3 of your money in JAY
and the rest in ELIZABETH. What is the variance of the portfolios
returns?
"The characteristics of two stocks traded in the economy are as follows: Stock A, expected return=13%,...
"The characteristics of two stocks traded in the economy are as
follows: Stock A, expected return=13%, standard deviation=60%;
Stock B, expected return=8%, standard deviation=40%. Correlation
between A and B is -1. If the market risk premium is 4%, what is
the expected return for a portfolio with a beta of 1.5 in a CAPM
universe?"
16%
15%
14%
None of the above
"The characteristics of two stocks traded in the economy are as follows: Stock A, expected return=13%,...
"The characteristics of two stocks traded in the economy are as
follows: Stock A, expected return=13%, standard deviation=60%;
Stock B, expected return=8%, standard deviation=40%. Correlation
between A and B is -1. If the market risk premium is 4%, what is
the expected return for a portfolio with a beta of 3 in a CAPM
universe?"
15%
18%
22%
None of the above
RISK AND RETURN – (A) Consider the expected return and standard deviation of these four stocks...
RISK AND RETURN –
(A) Consider the expected return and standard deviation
of these four stocks (chart below). If investors are buying only
one stock, which one of these stocks would no investor buy?
Why? (PLEASE INCLUDE FORMULAS USED TO SOLVE PROBLEM FOR
EXCEL).
STOCK
EXPECTED RETURN
STANDARD DEVIATION
A
6%
1%
B
7%
1.5%
C
7%
2%
D
8%
2%
ADDING AN ASSET TO A PORTFOLIO -
(B) Your current portfolio's cash returns over the past
three years look...
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