You have gathered information about the expected returns and
standard deviations of two stocks, which is given in the table
below:
Expected return
Standard deviation
Bull Inc
10.0%
30.0%
Bear Inc
6.0%
20.0%
a. Discuss which stock is more attractive and why? (hint:
think about the assumptions first)
You are going to form a portfolio, which includes these two
stocks. The value of your total portfolio is 800 000 and investment
into stock B is 60% of the total portfolio....
You have gathered information about the expected returns and
standard deviations of two stocks, which is given in the table
below:
Expected return
Standard deviation
Bull Inc
10.0%
30.0%
Bear Inc
6.0%
20.0%
a. Discuss which stock is more attractive and why? (hint:
think about the assumptions first)
You are going to form a portfolio, which includes these two
stocks. The value of your total portfolio is 800 000 and investment
into stock B is 60% of the total portfolio....
You have gathered information about the expected returns and
standard deviations of two stocks, which is given in the table
below:
Expected return
Standard deviation
Stock A
15.0%
30.0%
Stock B
10.0%
40.0%
a. Discuss which stock is more attractive and why?
You are going to form a portfolio, which includes these two
stocks. The value of your total portfolio is 500 000 and investment
into stock B is 30% of the total portfolio.
b. It is estimated that the...
You have gathered information about the expected returns and
standard deviations of two stocks, which is given in the table
below:
Expected return
Standard deviation
Bull Inc
10.0%
30.0%
Bear Inc
6.0%
20.0%
a. Discuss which stock is more attractive and why? (hint:
think about the assumptions first)
You are going to form a portfolio, which includes these two
stocks. The value of your total portfolio is 800 000 and investment
into stock B is 60% of the total portfolio....
What are the expected returns of the two stocks? b. What are
the standard deviations of the returns of the two stocks? c. If
their correlation is 0.43, what is the expected return and
standard deviation of a portfolio of 58% stock A and 42% stock
B? a. What are the expected returns of the two stocks?
Stock A Stock B
1 0.09 0.06
2 0.04 0.02
3 0.15 0.03
4 -0.04 0.01
5 0.09 -0.05
Stocks A and B have the expected returns and standard deviations
shown in the table below: Asset E(R) Std. deviation A 15% 30% B 20%
50% The correlation between A and B is 0.6. The risk-free rate is
3% and you have a risk-aversion parameter of 2. What is the
proportion of your investment in A and B, respectively, in your
optimal risky portoflio? A. 25.0% in A ; 75.0% in B B. 76.6% in A;
23,4% in B C....
Stocks A and B have expected returns of 8% and 10%, and standard
deviations of 12% and 18%, respectively. Calculate the expected
return and standard deviation of equally weighted portfolios of the
two stocks if the correlation between the two stocks is 0.5? Repeat
the calculation for correlation of 0 and -0:5. If you could set the
correlation between the two stocks, which of the three values would
you choose? Explain.
Portfolio Standard DeviationSuppose the expected returns and
standard deviations of Stocks A and B are E(RA) = .11, E(RB) = .13,
σA = .47, and σB = .81. a.Calculate the expected return and
standard deviation of a portfolio that is composed of 40 percent A
and 60 percent B when the correlation between the returns on A and
B is .5. b.Calculate the standard deviation of a portfolio with the
same portfolio weights as in part (a) when the correlation...
Problem 11-28 Portfolio Standard Deviation
Suppose the expected returns and standard deviations of Stocks
A and B are E(RA) = .091,
E(RB) = .151, σA = .361, and
σB = .621.
a-1.
Calculate the expected return of a portfolio that is composed of
36 percent A and 64 percent B when the
correlation between the returns on A and B is
.51. (Do not round intermediate calculations and round your
final answer to 2 decimal places. (e.g., 32.16))
...
Five investment alternatives have the following returns and
standard deviations of returns.
Alternatives
Returns:
Expected Value
Standard
Deviation
A
$
1,110
$
1,270
B
3,970
820
C
3,970
1,330
D
5,790
2,650
E
12,500
7,350
Calculate the coefficient of variation and rank the five
alternatives from lowest risk to the highest risk by using the
coefficient of variation. (Round your answers to 3 decimal
places.)