Question
In: Finance
Given the following information, what is the standard deviation of the returns on a portfolio that...
Given the following information, what is the standard deviation of the returns on a portfolio that is invested 40 percent in stock A, 35 percent in stock B, and the remainder in stock C?
| State of Economy | Probability of State of Economy | Stock A | Stock B | Stock C |
| Normal | 0.65 | 14.30% | 16.70% | 18.20% |
| Recession | 0.35 | -9.80% | 5.40% | -26.90% |
| A | 12.72% | |||
| B | 14.07% | |||
| C | 1.41% | |||
| D | 7.41% | |||
| E | 11.86% |
Solutions
jeff jeffy answered 2 years agoRelated Solutions
What is the (population) standard deviation of portfolio returns?
Returns on stocks X and Y are listed below: Period 1 2 3 4 5 6 7 Stock X 6% 5% -2% 10% 3% 8% -4% Stock Y 11% 7% 10% -2% 3% 5% -1% Consider a portfolio of 70% stock X and 30% stock Y. What is the (population) standard deviation of portfolio returns? Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123). Note that the correct answer will be evaluated based on...
What is the standard deviation of the returns on a portfolio that is invested in stocks...
What is the standard deviation of the returns on a portfolio
that is invested in stocks A, B, and C? 20 percent of the portfolio
is invested in stock A and 45 percent is invested in stock C.
State of Economy
Boom Normal Bust
Probability of Returns if State Occurs
State of Economy Stock A Stock B Stock C 20% 9% 3% 11%
55%4%5%8% 25% -2% 10% -13%
Given the following information calculate the standard deviationof returns of a portfolio that combines government...
Given the following information calculate the standard deviation
of returns of a portfolio that combines government bonds with the
market portfolio.Rm = .11Rf = .05Standard Deviation of market return = 0.14Enter your answer as a decimal accurate to three decimal
places.Proportion invested in Rm = 0.5
Given the following information, calculate the expected return and standard deviation for a portfolio that has...
Given the following information, calculate the expected return
and standard deviation for a portfolio that has 50 percent invested
in Stock A, 20 percent in Stock B, and the balance in Stock C.
(Do not round intermediate calculations. Enter your answers
as a percent rounded to 2 decimal places.)
Returns
State of
Economy
Probability of
State of Economy
Stock A
Stock B
Stock C
Boom
.80
15
%
18
%
25
%
Bust
.20
16
0
−16
Expected return:__________%
Standard...
Given the following information, calculate the expected return and standard deviation for a portfolio that has...
Given the following information, calculate the expected return
and standard deviation for a portfolio that has 25 percent invested
in Stock A, 32 percent in Stock B, and the balance in Stock C.
(Do not round intermediate calculations. Enter your answers
as a percent rounded to 2 decimal places.
Returns
State of Economy
Probability of State of Economy
Stock A
Stock B
Stock C
Boom
0.30
10
%
19
%
20
%
Bust
0.70
11
0
−11
Expected return
%...
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...
What is the standard deviation of the returns on a $40,000 portfolio which consists of stocks...
What is the standard deviation of the returns on a $40,000
portfolio which consists of stocks C and D? Stock C is valued at
$22,000.
State of
Economy
Probability of
State of Economy
Returns if State Occurs
Stock C
Stock D
Boom
20%
15%
4%
Normal
70%
9%
6%
Recession
10%
-2%
5%
You are given the following information on two securities. Security Expected Return Standard Deviation of Returns...
You are given the following information on two securities.
Security
Expected Return
Standard Deviation of Returns
A
10.0%
14.0%
B
16.0%
12.0%
The correlation between the returns on the two securities is
+0.6. The standard deviation of returns of a portfolio earning an
expected return of 14.0 percent is closest to:
Group of answer choices
A 11.4%.
B 9.3%.
C 27.1%.
D 12.7%.
Describe what happens to the expected value and standard deviation of the portfolio returns when the...
Describe what happens to the expected value and standard
deviation of the portfolio returns when the coeffi cient of
correlation decreases.
What is the standard deviation and mean returns for an equal weighted portfolio that consists stocks...
What is the standard deviation and mean returns for an equal
weighted portfolio that consists stocks X,Y,Z(equally weighted).
Use the data given below.
Stocks
Mean Return
Variance of Return
X
2
2.25
Y
4
36
Z
6
4
Correlations
X and Y
X and Z
Z and Y
0.5
0.2
0.9
2. A bond has a face value of $1000 with a time to maturity ten
years from now. The yield to maturity of the bond now is
10%. What is...
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