Question

In: Finance

The expected return and standard deviation of a portfolio that is 40 percent invested in 3...

The expected return and standard deviation of a portfolio that is 40 percent invested in 3 Doors, Inc., and 60 percent invested in Down Co. are the following:

3 Doors, Inc. Down Co.
Expected return, E(R) 15 % 11 %
Standard deviation, σ 48 37

What is the standard deviation if the correlation is +1? 0? −1? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. )

Standard Deviation
Correlation +1 %
Correlation 0 %
Correlation −1 %

Solutions

Expert Solution

jeff jeffy answered 2 hours ago
Next > < Previous

Related Solutions

The expected return and standard deviation of a portfolio that is 70 percent invested in 3...
The expected return and standard deviation of a portfolio that is 70 percent invested in 3 Doors, Inc., and 30 percent invested in Down Co. are the following: 3 Doors, Inc. Down Co.   Expected return, E(R) 12 % 10 %   Standard deviation, σ 45 34 What is the standard deviation if the correlation is +1? 0? −1?
The expected return and standard deviation of a portfolio that is 50 percent invested in 3...
The expected return and standard deviation of a portfolio that is 50 percent invested in 3 Doors, Inc.,and 50 percent invested in Down Co. are the following: 3 Doors, Inc. Down Co. Expected return, E(R) 14 % 10 % Standard deviation, σ 42 31 What is the standard deviation if the correlation is +1? 0? −1?
The expected return and standard deviation of a portfolio that is 50 percent invested in 3...
The expected return and standard deviation of a portfolio that is 50 percent invested in 3 Doors, Inc., and 50 percent invested in Down Co. are the following: 3 Doors, Inc. Down Co. Expected return, E(R) 14 % 11 % Standard deviation, σ 47 36 What is the standard deviation if the correlation is +1? 0? −1? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)...
If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio expected return? The variance? The standard deviation?
Consider the following information about three stocks: State of Economy Probability of State of Economy Rate of Return If State Occurs Stock A Stock B Stock C Boom .25 .21 .36 .55 Normal .60 .17 .13 .09 Bust .15 .00 −.28 −.45 If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio expected return? The variance? The standard deviation? If the expected T-bill rate is 3.80 percent, what is...
Calculate the expected return and standard deviation of a portfolio comprised of $4,500 invested in stock...
Calculate the expected return and standard deviation of a portfolio comprised of $4,500 invested in stock S and $3,000 invested in stock T. State of Economy Probability of State of Economy Rate of Return if State Occurs (Stock S) Rate of Return if State Occurs (Stock T) Boom 10% 12% 4% Normal 65% 9% 6% Recession 25% 2% 9%
Calculate the expected return and standard deviation of the portfolio.
A portfolio consists of two stocks:   Stock                 Expected Return            Standard Deviation             Weight   Stock 1                          10%                                     15%                            0.30 Stock 2                          13%                                     20%                            ???   The correlation between the two stocks’ return is 0.50   Calculate the expected return and standard deviation of the portfolio. Expected Return: Standard Deviation: (i) Briefly explain, in general, when there would be “benefits of diversification” (for any       portfolio of two securities).               (ii) Describe whether the above portfolio would...
1. What is the expected standard deviation of the returns of a portfolio that is invested...
1. What is the expected standard deviation of the returns of a portfolio that is invested 25 percent in Stock A, 40 percent in Stock B, and the remainder invested in Stock C? (Hint: create a column showing the distribution of returns for the portfolio. Then, find the portfolio's expected return and variance as normally done for a single asset.) State of Economy Probability Return of A Return of B Return of C Boom 0.20 29% 15% 6% Normal 0.50...
You have a portfolio with a standard deviation of 25 % and an expected return of...
You have a portfolio with a standard deviation of 25 % and an expected return of 15 %. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 20 % of your money in the new stock and 80 % of your money in your existing​ portfolio, which one should you​ add? Expected Return Standard Deviation Correlation with Your​ Portfolio's Returns Stock A 15​% 23​% 0.4 Stock B 15​%...
You have a portfolio with a standard deviation of 22 % and an expected return of...
You have a portfolio with a standard deviation of 22 % and an expected return of 16 %. You are considering adding one of the two shares in the table below. If after adding the shares you will have 20 % of your money in the new shares and 80 % of your money in your existing​ portfolio, which one should you​ add? Expected return Standard deviation Correlation with your​ portfolio's returns Share A 13​% 26​% 0.4 Share B 13​%...
You have a portfolio with a standard deviation of 30 % and an expected return of...
You have a portfolio with a standard deviation of 30 % and an expected return of 18 %. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 30 % of your money in the new stock and 70 % of your money in your existing​ portfolio, which one should you​ add? Expected Return Standard Deviation Correlation with Your Portfolio's Returns Stock A 15% 23% 0.3 Stock B 15%...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT