Question
In: Finance
Say you have $10,000 to invest and you invest $4,000 in stock A and the rest...
Say you have $10,000 to invest and you invest $4,000 in stock A and the rest in stock B. You know that the expected returns of stocks A and B are .2 and .1, respectively. If the correlation coefficient between the returns of the two assets is .67, find out the expected portfolio returns
a. 15%
b. 14%
c. 16%
d. Can not be determined
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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The monthly interest rate is 0.5%.
a. You think the stock price will go up soon, and want to trade
120 shares. What should you do? Enter 120 for buying 120 shares (on
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b. What is your initial percentage margin (entered as a decimal
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1.You invest 30% of funding in Stock M and the rest in Stock N. The return...
1.You invest 30% of funding in Stock M and the rest in Stock N.
The return on Stock M is 12% and its standard deviation is 7%. The
return on Stock N is 25% with a standard deviation of 11%. Assume
the two stocks have a correlation coefficient of 0.3. Calculate
this portfolio’s return and standard deviation.
2. If you invest your money in 3 stocks: A, B, C. Each stock has
a return of 11%,15%, and 21%. Your funding...
Let's say that you are looking to invest in two stocks A and B. Stock A...
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Stock A has a beta of 1.19 and based on your best estimates is
expected to have a return of 13%. Stock B has a beta of 1.61 and is
expected to earn 7%. If the risk-free rate is currently 2% and the
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Work by hand no financial calculator
Find portfolio variance You invest $6,000 in the stock and $4,000 in the bond outcome P...
Find portfolio variance
You invest $6,000 in the stock and $4,000 in the bond
outcome
P
Rs
Rb
recession
30%
-11%
16%
normal
40%
13%
6%
boom
30%
-7%
-4%
Find portfolio variance You invest $6,000 in the stock and $4,000 in the bond outcome P...
Find portfolio variance You invest $6,000 in the stock and
$4,000 in the bond
outcome
P
Rs
Rb
recession
30%
-11%
16%
normal
40%
13%
6%
boom
30%
27%
-4%
If you invest $4,000 today, how much will you have in 5 years at 6% (compounded...
If
you invest $4,000 today, how much will you have in 5 years at 6%
(compounded semiannually)?
Let’s say an investment salesperson outlines a new program whereby you invest $10,000 today and receive...
Let’s say an investment salesperson outlines a new program
whereby you invest $10,000 today and receive $25,000 in 5 years.
Which of the following statements is true?
This is a bad investment because the return is inadequate.
You can calculate the IRR of this investment from the
information given, but you cannot evaluate it.
This is clearly a good investment because you get back $15,000
more than you paid, a 150% return.
You can calculate the PV of this investment...
You have just received an inheritance of $10,000 and you decide that you should invest the...
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follows a large-value approach to investing. This means that the
mutual fund invests only in large, established companies that are
considered to be a good bargain. The second type following a
large-growth...
You have just received an inheritance of $10,000 and you decide that you should invest the...
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that you should invest the money rather than blow it on frivolous
items. You have decided that you will invest the money in one of
two types of mutual funds. The first type that you are considering
follows a large-value approach to investing. This means that the
mutual fund invests only in large, established companies that are
considered to be a good bargain. The second type following a
large-growth...
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