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In: Finance
Stock A has an expected return of 20% and a standard deviation of 28%. Stock B...
Stock A has an expected return of 20% and a standard deviation of 28%. Stock B has an expected return of 14% and a standard deviation of 13%. The risk-free rate is 6.6% and the correlation between Stock A and Stock B is 0.2. Build the optimal risky portfolio of Stock A and Stock B. What is the expected return on this portfolio?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Asset A has an expected return of 15% and standard deviation of 20%. Asset B has an expected return of 20% and standard deviation of 15%.
1. Asset A has an expected return of 15% and standard deviation of
20%. Asset B has an expected return of 20% and standard deviation
of 15%. The riskfree rate is 5%. A risk-averse investor would
prefer a portfolio using the risk-free asset and _______.
A) asset A
B) asset B
C) no risky asset
D) cannot tell from data provided2. The Sharpe-ratio is useful for
A) borrowing capital for investing
B) investing available capital
C) correctly...
Stock A has an expected return of 15% and a standard deviation of 26%. Stock B...
Stock A has an expected return of 15% and a standard deviation
of 26%. Stock B has an expected return of 15% and a standard
deviation of 12%. The risk-free rate is 4% and the correlation
between Stock A and Stock B is 0.5. Build the optimal risky
portfolio of Stock A and Stock B. What is the standard deviation of
this portfolio? Round answer to 4 decimal places
Stock A has an expected return of 15% and a standard deviation of 26%. Stock B...
Stock A has an expected return of 15% and a standard deviation
of 26%. Stock B has an expected return of 15% and a standard
deviation of 12%. The risk-free rate is 4% and the correlation
between Stock A and Stock B is 0.5. Build the optimal risky
portfolio of Stock A and Stock B. What is the standard deviation of
this portfolio?
Stock A has an expected return of 18% and a standard deviation of 33%. Stock B...
Stock A has an expected return of 18% and a standard deviation
of 33%. Stock B has an expected return of 13% and a standard
deviation of 17%. The risk-free rate is 3.6% and the correlation
between Stock A and Stock B is 0.2. Build the optimal risky
portfolio of Stock A and Stock B. What is the standard deviation of
this portfolio?
Stock A has an expected return of 17% and a standard deviation of 29%. Stock B...
Stock A has an expected return of 17% and a standard deviation
of 29%. Stock B has an expected return of 14% and a standard
deviation of 18%. The risk-free rate is 2.8% and the correlation
between Stock A and Stock B is 0.3. Build the optimal risky
portfolio of Stock A and Stock B. What is the expected return on
this portfolio?
Stock A has an expected return of 16% and a standard deviation of 31%. Stock B...
Stock A has an expected return of 16% and a standard deviation
of 31%. Stock B has an expected return of 15% and a standard
deviation of 14%. The risk-free rate is 3.2% and the correlation
between Stock A and Stock B is 0.5. Build the optimal risky
portfolio of Stock A and Stock B. What is the standard deviation of
this portfolio?
Stock A has an expected return of 5% and standard deviation of 10%. Stock B has...
Stock A has an expected return of 5% and standard deviation of
10%. Stock B has an expected return of 10% and standard deviation
of 15%. The correlation between the two stocks’ returns is
0.70. If you wanted to form a portfolio of these
two stocks and wanted that portfolio to have an expected return of
8%, what weights would you put on each stock? Show your work
(“algebra”). What would be the
standard deviation of this portfolio?
What are the expected return and standard deviation of stock A and stock B?
Consider the following information:
State Probability A
B
Boom 0.6
20% -5%
Bust 0.4
-10% 10%What are the expected return and standard deviation of stock A
and stock B?If you invest 50% of your money in stock A and 50% of your
money in stock B, what are the expected return and standard
deviation for the portfolio as a whole (considering both states of
the economy)?Use the results...
7. Stock A has an expected return of 20 percent and a standard deviation of 38...
7. Stock A has an expected return of 20 percent and a standard
deviation of 38 percent. Stock B has an expected return of 26
percent and a standard deviation of 42 percent. Calculate the
expected return and standard deviations for portfolios with the 6
different weights shown below assuming a correlation coefficient of
0.28 between the returns of stock A and B.
WA
WB
1.00 0.00
0.80 0.20
0.60 0.40
0.40 0.60
0.20 0.80...
Stock A has an expected return of 20 percent and a standard deviation of 38 percent....
Stock A has an expected return of 20 percent and a standard
deviation of 38 percent. Stock B has an expected return of 26
percent and a standard deviation of 42 percent. Calculate the
expected return and standard deviations for portfolios with the 6
different weights shown below assuming a correlation coefficient of
0.28 between the returns of stock A and B.
WA
WB
1.00 0.00
0.80 0.20
0.60 0.40
0.40 0.60
0.20 0.80...
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