Question
In: Finance
8. Peter Griffin calculates that his portfolio's risk, as measured by the standard deviation, is 19.67%....
8. Peter Griffin calculates that his portfolio's risk, as measured by the standard deviation, is 19.67%. His portfolio is made up of many stocks from just two companies, South Park Company and Quahog Company. South Park Co.'s returns have a standard deviation of 12.9% and Quahog Co.'s returns have a standard deviation of 28.84%. If the weight of Quahog Co. in his portfolio is 48.21%, what is the correlation between the returns of Quahog and South Park.
9.
A portfolio has an excess return of 15.9 % and a standard deviation of 15.23 %. What is the Sharpe Ratio for this portfolio?
Solutions
Expert Solution
question 8
where w = weight of stock
σ = standard deiviation of individual stock
(19.67)2=(0.5179)2*(12.9)2+(0.4821)2*(28.84)2+2*0.5179*0.4821*X*12.9*28.84
386.91=44.63+193.31+185.78*X
X= 148.97/185.78
CORRELATOIN =0.80186
question 9
sharpe ratio = excess return/ standard deviation
=15.9/15.23
=1.0440
plz leave me positive rating thank you
jeff jeffy answered 2 years agoRelated Solutions
a) “The standard deviation of a portfolio's return cannot be reduced to zero by holding all...
a) “The standard deviation of a portfolio's return cannot be
reduced to zero by holding all the securities in the market.” True
or false? Explain. (2 mark) An investor buys 1 share of ABC Ltd at
the price of $32 on December 1, 2019. The firm is not expected to
pay any dividends. Consider the following three possible scenarios
for the share price on December 1, 2020: $50 with a probability of
30% $35 with a probability of 60% $23...
a) “The standard deviation of a portfolio's return cannot be reduced to zero by holding all...
a) “The standard deviation of a portfolio's return
cannot be reduced to zero by holding all the securities in the
market.” True or false? Explain. (2 mark)
An investor buys 1 share of ABC Ltd at the price of
$32 on December 1, 2019. The firm is not expected to pay any
dividends. Consider the following three possible scenarios for the
share price on December 1, 2020:
$50 with a probability of 30%
$35 with a probability of 60%
$23...
a) “The standard deviation of a portfolio's return cannot be reduced to zero by holding all...
a) “The standard deviation of a portfolio's return cannot be
reduced to zero by holding all the securities in the market.” True
or false? Explain. (2 mark)
An investor buys 1 share of ABC Ltd at the price of $32 on
December 1, 2019. The firm is not expected to pay any dividends.
Consider the following three possible scenarios for the share price
on December 1, 2020:
$50 with a probability of 30%
$35 with a probability of 60%
$23...
a) “The standard deviation of a portfolio's return cannot be reduced to zero by holding all...
a) “The standard deviation of a portfolio's return cannot be
reduced to zero by holding all the securities in the market.” True
or false? Explain. (2 mark)
An investor buys 1 share of ABC Ltd at the price of $32 on
December 1, 2019. The firm is not expected to pay any dividends.
Consider the following three possible scenarios for the share price
on December 1, 2020:
$50 with a probability of 30%
$35 with a probability of 60%
$23...
the standard deviation of the portfolio's return is lower than those of the two securities, A...
the standard deviation of the portfolio's return is lower than
those of the two securities, A and B. What is the intuition behind
this? Is it always the case? Examine how the returns on these two
securities behave. Do they move together or in opposite
directions?
Meaning of the Beta
If there is a security with a negative beta, for example -0.5,
what can you say about the expected return of the security based on
the Capital Asset Pricing Model...
the standard deviation of the portfolio's return is lower than those of the two securities, A...
the standard deviation of the portfolio's return is lower than
those of the two securities, A and B. What is the intuition behind
this? Is it always the case? Examine how the returns on these two
securities behave. Do they move together or in opposite
directions?
3. The market portfolio expected return is 8% and its standard deviation is 16%. The risk-free...
3. The market portfolio expected return is 8% and its standard
deviation is 16%. The risk-free rate is 1%. Assume that the CAPM
holds. What is the standard deviation of the portfolio that invests
40% in the risk-free asset and 60% in the market? A. 8.1%. B. 9.6%.
C. 10.5%. D. 11.1%. (use financial calculator)
4. The beta of company XYZ’s stock is 2. The annual risk-free
rate is 2% and the market portfolio’s expected return is 9%. What
is...
What is the standard deviation of the risk-free rate?
You expect the following set of possible outcomes for a
stock:OutcomeProbabilityEnding Stock PriceHolding Period Return(Percent)Risk-free rate(Percent)Good35%$12044.54Neutral30%$100142Bad35%$70-16.5.5What is the standard deviation of the risk-free rate? Please
enter your answer in percent rounded to the nearest basis
point.
Write a program that calculates mean and standard deviation for four user entered values. The most...
Write a program that calculates mean and standard deviation for
four user entered values. The most common measures of a sample are
the mean and the standard deviation. the mean is the sum of the
values divided by the number of elements in the data set. The
dispersion - or spread in the values - is measured by the standard
deviation The equation for the mean is x¯ = x1 + x2 + · · · + xn
The equation...
JAVA I need to write a code that calculates mean and standard deviation using arrays and...
JAVA
I need to write a code that calculates mean and standard
deviation using arrays and OOP. This is what I have so far. I'm
close but my deviation calculator method is throwing errors.
Thanks so much :)
import java.util.Scanner;
import java.util.Arrays;
public class STDMeanArray {
private double[] tenUserNums = new double[10];//Initialize an array with ten index'
private double mean;
private double deviation;
Scanner input = new Scanner(System.in);//create new scanner object
/*//constructor
public STDMeanArray(double tenUserNum [], double mean, double deviation){...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Due to a recession, expected inflation this year is only 4.75%. However, the inflation rate in...
- What are the benefits of doing a pilot program before a full scale rollout of a...
- It is a calm summer day in southeast Iowa at the Ottumwa air traffic control radar...
- 1. Write a detailed article on Evolution of attacks on the internet & web [your article...
- Analyze the role of the contingency plan coordinator (CPC) in the scope of preparing a BIA....
- Amazing Manufacturing, Inc., has been considering the purchase of a new manufacturing facility for $500,000. The...
- LANGUAGE: JAVA Create a New Project called YourLastNameDomainName. Write a DomainName class that encapsulates the concept...
ADVERTISEMENT