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In: Finance
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?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Stock A has an expected return of 16% and a standard deviation of 30%.
Stock A has an expected return of 16% and a standard deviation
of 30%. Stock B has an expected return of 14% and a standard
deviation of 13%. The risk-free rate is 4.7% and the correlation
between Stock A and Stock B is 0.9. Build the optimal risky
portfolio of Stock A and Stock B. What is the expected return on
this portfolio?
Stock Xillow has an expected return of 16% and a standard deviation of 4%. Stock Yash...
Stock Xillow has an expected return of 16% and a standard
deviation of 4%. Stock Yash has an expected return of 12% and a
standard deviation of 3%. Assume you have constructed a portfolio
consisting of 75% weight in Stock Xillow and 25% in Stock Yash.
Furthermore assume that the stocks have a correlation coefficient
of -0.3. What is the standard deviation of the portfolio? A. Less
than 2% B. Greater than or equal to 2% and less than 2.5%...
The stock of Bruin, Inc., has an expected return of 16 percent and a standard deviation...
The stock of Bruin, Inc., has an expected return of 16 percent
and a standard
deviation of 30 percent. The stock of Wildcat Co. has an expected
return of 8
percent and a standard deviation of 14 percent. The correlation
between the two
stocks is .20.
Required:
a) What are the expected return and standard deviation of a
portfolio that is
40 percent invested in Bruin, Inc., and 60 percent invested in
Wildcat Co.?
b) What is the standard deviation...
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 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?
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 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...
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