You have a three-stock portfolio. Stock A has an expected return of 16 percent and a...

You have a three-stock portfolio. Stock A has an expected return of 16 percent and a standard deviation of 41 percent, Stock B has an expected return of 20 percent and a standard deviation of 46 percent, and Stock C has an expected return of 15 percent and a standard deviation of 46 percent. The correlation between Stocks A and B is .30, between Stocks A and C is .20, and between Stocks B and C is .05. Your portfolio consists of 32 percent Stock A, 20 percent Stock B, and 48 percent Stock C. Calculate the expected return and standard deviation of your portfolio. The formula for calculating the variance of a three-stock portfolio is: σp2 = xA2 σA2 + xB2 σB2 + xC2 σC2+ 2xAxBσAσBCorr(RA,RB) + 2xAxCσAσCCorr(RA,RC) + 2xBxCσBσCCorr(RB,RC) (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Expert Solution

Calculations-

Please upvote if the ans is helpful.In case of doubt,do comment.Thanks.

jeff jeffy answered 2 years ago

You have a three-stock portfolio. Stock A has an expected return of 17 percent and a...

You have a three-stock portfolio. Stock A has an expected return of 17 percent and a standard deviation of 38 percent, Stock B has an expected return of 20 percent and a standard deviation of 56 percent, and Stock C has an expected return of 15 percent and a standard deviation of 38 percent. The correlation between Stocks A and B is 0.30, between Stocks A and C is 0.20, and between Stocks B and C is 0.05. Your portfolio...

You have a portfolio worth $101,000 that has an expected return of 11.8 percent. The portfolio...

You have a portfolio worth $101,000 that has an expected return of 11.8 percent. The portfolio has $18,400 invested in Stock O, $26,200 invested in Stock P, with the remainder in Stock Q. The expected return on Stock O is 16.1 percent and the expected return on Stock P is 13 percent. What is the expected return on Stock Q?

You have a portfolio worth $86,000 that has an expected return of 11.2 percent. The portfolio...

You have a portfolio worth $86,000 that has an expected return of 11.2 percent. The portfolio has $17,800 invested in Stock O, $25,600 invested in Stock P, with the remainder in Stock Q. The expected return on Stock O is 15.5 percent and the expected return on Stock P is 12 percent. What is the expected return on Stock Q? Multiple Choice 8.92% 9.60% 10.27% 11.20% 12.97%

You have a portfolio of three stocks: Stock A, Stock B, and Stock C. The expected return...

You have a portfolio of three stocks: Stock A, Stock B, and Stock C. The expected return of Stock A is 8%, the expected return of Stock B is 10%, and the expected return of Stock C is 12%. The expected return of the portfolios is 10.5%. If the weight of asset B is three times the weight of asset A, what are the weights for the three assets?

You have a portfolio with a standard deviation of 21% and an expected return of 16%....

You have a portfolio with a standard deviation of 21% and an expected return of 16%. 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 12% 25% 0.2 Stock B 12% 17% 0.5 What is...

The stock of Bruin, Inc., has an expected return of 16 percent and a standard deviation...

The stock of Bruin, Inc., has an expected return of 16 percent and a standard deviation of 30 percent. The stock of Wildcat Co. has an expected return of 8 percent and a standard deviation of 14 percent. The correlation between the two stocks is .20. Required: a) What are the expected return and standard deviation of a portfolio that is 40 percent invested in Bruin, Inc., and 60 percent invested in Wildcat Co.? b) What is the standard deviation...

You have $15,000 to invest in a stock portfolio and a goal of an expected return...

You have $15,000 to invest in a stock portfolio and a goal of an expected return of 12.5 percent. You can choose between Stock E with an expected return of 14.3 percent and Stock F with an expected return of 10.5 percent. How much should you invest in each stock? Please show work in Excel sheet Portfolio Value $ 15,000 Stock E E(R) 14.30% Stock F E(R) 10.50% Portfolio E(R) 12.50% Weight of Stock X ? Weight of Stock Y...

You would like to invest $20,000 and have a portfolio expected return of 12 percent. You...

You would like to invest $20,000 and have a portfolio expected return of 12 percent. You are considering two securities, X and Y. X has an expected return of 20 percent and Y has an expected return of 10 percent. How much should you invest in stock X if you invest the balance in stock Y to achieve the 12 percent portfolio return? a) $5,500 b) $4,000 c) $7,000 d) $6,250

A portfolio is entirely invested into BBB stock, which is expected to return 16.4 percent, and...

A portfolio is entirely invested into BBB stock, which is expected to return 16.4 percent, and ZI bonds, which are expected to return 8.6 percent. 48 percent of the funds are invested in BBB and the rest in ZI. What is the expected return on the portfolio? Select one: a. 13.64% b. 14.36% c. 12.34% d. 14.20% e. 11.69%

You put half of your money in a stock portfolio that has an expected return of...

You put half of your money in a stock portfolio that has an expected return of 14% and a standard deviation of 23%. You put the rest of your money in a risky bond portfolio that has an expected return of 6% and a standard deviation of 11.3%. The stock and bond portfolios have a correlation of 0.42. What is the standard deviation of the resulting portfolio?

Question