Question
In: Finance
Two assets' correlation is 0.1. The first has expected return of 9% and standard deviation of...
Two assets' correlation is 0.1. The first has expected return of 9% and standard deviation of 16%, the second has expected return of 13% and standard deviation of 20%.
Calculate the minimum amount of risk (standard deviation) you'll need to take if investing in these two assets. (Provide your answer in percent rounded to two decimals omitting the % sign)
Solutions
Expert Solution
Please
upvote if the ans is helpful. In case of doubt,do
comment.Thanks.
jeff jeffy answered 1 year agoRelated Solutions
Two assets' correlation is 0.1. The first has expected return of 9% and standard deviation of...
Two assets' correlation is 0.1. The first has expected return of
9% and standard deviation of 16%, the second has expected return of
13% and standard deviation of 20%. Calculate the minimum amount of
risk (standard deviation) you'll need to take if investing in these
two assets.
Two assets' correlation is -0.2. The first has expected return of 9% and standard deviation of...
Two assets' correlation is -0.2. The first has expected return
of 9% and standard deviation of 16%, the second has expected return
of 13% and standard deviation of 20%.
Calculate the minimum amount of risk (standard deviation) you'll
need to take if investing in these two assets. (Provide your answer
in percent rounded to two decimals omitting the % sign)
Two assets' correlation is -0.8. The first has expected return of 9% and standard deviation of...
Two assets' correlation is -0.8. The first has expected return
of 9% and standard deviation of 16%, the second has expected return
of 13% and standard deviation of 20%.
Calculate the minimum amount of risk (standard deviation) you'll
need to take if investing in these two assets. (Provide your answer
in percent rounded to two decimals omitting the % sign)
1) Two assets' correlation is 0. The first has expected return of 9% and standard deviation...
1) Two assets' correlation is 0. The first has expected return
of 9% and standard deviation of 16%, the second has expected return
of 13% and standard deviation of 20%. Calculate the minimum amount
of risk (standard deviation) you'll need to take if investing in
these two assets. (Provide your answer in percent rounded to two
decimals omitting the % sign)
2) You are creating a portfolio of two stocks. The first stock
has standard deviation of 22% , the...
There are 2 assets. Asset 1: Expected return 7.5%, standard deviation 9% Asset 2: Expected return...
There are 2 assets. Asset 1: Expected return 7.5%, standard
deviation 9% Asset 2: Expected return 11%, standard deviation 12%,
correlation with asset 1 is 0.4 You hold 30% of your portfolio in
asset 1 and 70% in asset 2. a) (1 point) What is the expected
return of your portfolio? b) (1 point) What is the covariance
between assets 1 and 2? c) (1 point) What is the standard deviation
of your portfolio?
Consider the following two assets: Asset A’s expected return is 15% and return standard deviation is...
Consider the following two assets: Asset A’s expected return is
15% and return standard deviation is 20%. Asset B’s expected return
is 10% and return standard deviation is 15%. The correlation
between assets A and B is 0.5.
(a) w1=0.75, w2=.50, find out expected returns and
SD/VARIANCE
(b) Instead of a correlation of 0.5 between assets A and B,
consider a correlation of - 0.5 and re-compute the above.
Consider a set of risky assets that has the following expected return and standard deviation: Asset...
Consider a set of risky assets that has the following expected
return and standard deviation:
Asset
Expected Return
E(r)
Standard Deviation
1
0.12
0.3
2
0.15
0.5
3
0.21
0.16
4
0.24
0.21
If your utility function is as described in the book/lecture
with a coefficient of risk aversion of 4.0 , then what
is the second-lowest utility you can obtain from an investment in
one (and only one) of these assets? Please calculate utility using
returns expressed in decimal form...
Covariance and Correlation Based on the following information, calculate the expected return and standard deviation of...
Covariance and Correlation Based on the following information,
calculate the expected return and standard deviation of each of the
following stocks. Assume each state of the economy is equally
likely to happen. What are the covariance and correlation between
the returns of the two stocks?
STATE OF ECONOMY
RETURN ON STOCK A
RETURN ON STOCK B
Bear
Normal
Bull
-.032
.124
.193
-.103
-.025
.469
Covariance and Correlation Based on the following information, calculate the expected return and standard deviation of...
Covariance and Correlation Based on the following information,
calculate the expected return and standard deviation of each of the
following stocks. Assume each state of the economy is equally
likely to happen. What are the covariance and correlation between
the returns of the two stocks?
STATE OF ECONOMY
RETURN ON STOCK A
RETURN ON STOCK B
Bear
Normal
Bull
-.032
.124
.193
-.103
-.025
.469
The market portfolio has an expected return of 9% and standard deviation of 25%. The risk-free...
The market portfolio has an expected return of 9% and standard
deviation of 25%. The risk-free rate is 3%. Bob has $300 to invest.
What is the standard deviation of Bob's portfolio if he borrows
$100 and invests $400 in the market portfolio?
a. 33.33%
b. 25.00%
c. 28.33%
d. 16.67%
e. 37.50%
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- More and more adults are considering commuting to work by bicycle rather than car, but few...
- Please answer these questions Data Processing and Analysis using python. Thank you In statistics, an outlier...
- Write a function file that accepts each of the four vectors as inputs. The function file...
- Kant says that to act morally is to act out of duty. How does this differ...
- Suppose you are trying to determine the capacity (in gallons) of the gas tank needed on...
- List the arithmetic operators used in BASIC and state their priorities of execution in a statement....
- Describe the espoused values of a company you have worked for (or been exposed to -...
ADVERTISEMENT