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In: Finance
Find the average return and standard deviation of an equal-weighted (1/3 in each) portfolio consisting of...
Find the average return and standard deviation of an equal-weighted (1/3 in each) portfolio consisting of the three stocks. Explain how a portfolio’s standard deviation can be lower than any of the three stock’s standard deviations that make up that portfolio. Year LAX return UWL return WIS return 2013 5% 2% 10% 2014 10% 4% 12% 2015 -3% 3% 8% 2016 12% -2% 9% 2017 1% 5% 15%
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Expert Solution
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -
jeff jeffy answered 1 year agoRelated Solutions
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Portfolio Average Return Standard Deviation Beta A &nb
Portfolio
Average Return Standard
Deviation Beta
A
14.7%
18.6%
1.47
B
8.8
14.2
.78
C
11.2
16.0
1.22
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SHOW WORK
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...
For a portfolio consisting of assets ABC and XYZ with return standard deviation given by 13...
For a portfolio consisting of assets ABC and XYZ with return
standard deviation given by 13 and 48, respectively, the
minimum-risk portfolio based on an assumption of ρ = − 1 has what
weight of asset XYZ?
(Enter your result as a percent; e.g., 38.5)
The expected return and standard deviation of a portfolio that is 70 percent invested in 3...
The expected return
and standard deviation of a portfolio that is 70 percent invested
in 3 Doors, Inc., and 30 percent invested in Down Co. are the
following:
3
Doors, Inc.
Down Co.
Expected return, E(R)
12
%
10
%
Standard deviation, σ
45
34
What is the standard
deviation if the correlation is +1? 0? −1?
The expected return and standard deviation of a portfolio that is 50 percent invested in 3...
The expected return and standard deviation of a portfolio that
is 50 percent invested in 3 Doors, Inc.,and 50 percent invested in
Down Co. are the following: 3 Doors, Inc. Down Co. Expected return,
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deviation if the correlation is +1? 0? −1?
The expected return and standard deviation of a portfolio that is 50 percent invested in 3...
The expected return and standard deviation of a portfolio that
is 50 percent invested in 3 Doors, Inc., and 50 percent invested in
Down Co. are the following: 3 Doors, Inc. Down Co. Expected return,
E(R) 14 % 11 % Standard deviation, σ 47 36 What is the standard
deviation if the correlation is +1? 0? −1? (Do not round
intermediate calculations. Enter your answer as a percent rounded
to 2 decimal places. Omit the "%" sign in your response.)...
The expected return and standard deviation of a portfolio that is 40 percent invested in 3...
The expected return and standard deviation of a portfolio that
is 40 percent invested in 3 Doors, Inc., and 60 percent invested in
Down Co. are the following:
3 Doors, Inc.
Down Co.
Expected return, E(R)
15
%
11
%
Standard deviation, σ
48
37
What is the standard deviation if the correlation is +1? 0? −1?
(Do not round intermediate calculations. Enter your answer
as a percent rounded to 2 decimal places. )
Standard Deviation
Correlation +1
%
Correlation...
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