Question
In: Statistics and Probability
Suppose that you want to create a portfolio that consists of stock X and stock Y....
Suppose that you want to create a portfolio that consists of stock X and stock Y. For a $1,000 investment, the expected return for stock X is $ 71 and the expected return for stock Y is $ 102. The variance for stock X is 2,700 and the variance for stock Y is 8,625. The covariance of stock X and stock Y is 5,976.
Complete parts (a) through (c).
a.) Compute the portfolio expected return and portfolio risk if the percentage invested in stock X is 30 %.
b.) Compute the portfolio expected return and portfolio risk if the percentage invested in stock X is 50 %.
c.)Compute the portfolio expected return and portfolio risk if the percentage invested in stock X is 80 %.
Solutions
orchestra answered 2 years agoRelated Solutions
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investment, the expected return for X is $75 and the expected
return for Y is $ 90 The variance for X is 1,725 and the variance
for Y is 12,225. The covariance of X and Y is 4,583.
a. The portfolio risk is $
b. Compute the portfolio expected return and portfolio risk if
you...
A portfolio consists of 50% invested in Stock X and 50% invested in Stock Y. We...
A portfolio consists of 50% invested in Stock X and 50% invested
in Stock Y. We expect two probable states to occur in the future:
boom or normal. The probability of each state and the return of
each stock in each state are presented in the table below. State
Probability of state Return on Stock X Return on Stock Y Boom 20%
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and standard deviation?
Select one: a....
Suppose John wishes to construct his portfolio with Stock X and Y, but he is not...
Suppose John wishes to construct his portfolio with
Stock X and Y, but he is not decided on the
weights. Jane wishes to construct her portfolio with Stock
Y and Z, also undecided on the weights.
Stock X
Stock Y
Stock Z
Expected Return
0.06
0.18
0.12
Standard Deviation
0.10
0.30
0.20
Covariance between X and Y
-0.027
Covariance between Y and Z
0.054
Compute the correlation coefficients for John's and Jane's
portfolios.
Which person has a greater chance to...
Suppose John wishes to construct his portfolio with Stock X and Y, but he is not...
Suppose John wishes to construct his portfolio with
Stock X and Y, but he is not decided on the
weights. Jane wishes to construct her portfolio with Stock
Y and Z, also undecided on the weights.
Stock X
Stock Y
Stock Z
Expected Return
0.06
0.18
0.12
Standard Deviation
0.10
0.30
0.20
Covariance between X and Y
-0.027
Covariance between Y and Z
0.054
(4 points) Compute the correlation coefficients for John's and
Jane's portfolios.
(3 points) Which person has...
Suppose John wishes to construct his portfolio with Stock X and Y, but he is not...
Suppose John wishes to
construct his portfolio with Stock X and Y, but he
is not decided on the weights. Jane wishes to construct her
portfolio with Stock Y and Z, also undecided on
the weights.
Stock
X
Stock
Y
Stock
Z
Expected
Return
0.06
0.18
0.12
Standard
Deviation
0.10
0.30
0.20
Covariance
between X and Y
-0.027
Covariance
between Y and Z
0.054
(4 points) Compute the correlation coefficients for John's and
Jane's portfolios.
(3 points) Which person has...
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What is the...
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