Your portfolio allocates equal amounts to three stocks. All three stocks have the same mean annual...

Your portfolio allocates equal amounts to three stocks. All three stocks have the same mean annual return of 13 percent. Annual return standard deviations for these three stocks are 30 percent, 40 percent, and 50 percent. The return correlations among all three stocks are zero. What is the smallest expected loss for your portfolio in the coming year with a probability of 2.5 percent? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Smallest expected loss %

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jeff jeffy answered 1 year ago

If a portfolio holds three stocks in equal amounts, and the betas of the three stocks...

If a portfolio holds three stocks in equal amounts, and the betas of the three stocks are 0, 0.5, and 1.1, what is the beta of the portfolio?

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...

Your portfolio allocates equal funds to DW Co. and Woodpecker, Inc., DW Co. stock has an...

Your portfolio allocates equal funds to DW Co. and Woodpecker, Inc., DW Co. stock has an annual return mean and standard deviation of 14 percent and 41 percent, respectively. Woodpecker, Inc., stock has an annual return mean and standard deviation of 11.2 percent and 57 percent, respectively. The return correlation between DW Co. and Woodpecker, Inc., is zero. What is the smallest expected loss for your portfolio in the coming month with a probability of 5 percent? (Negative amounts should...

Your portfolio allocates equal funds to the DW Co. and Woodpecker, Inc. DW Co. stock has...

Your portfolio allocates equal funds to the DW Co. and Woodpecker, Inc. DW Co. stock has an annual return mean and standard deviation of 12 percent and 35 percent, respectively. Woodpecker, Inc., stock has an annual return mean and standard deviation of 23 percent and 49 percent, respectively. The return correlation between DW Co. and Woodpecker, Inc., is zero. What is the smallest expected loss for your portfolio in the coming month with a probability of 16 percent? (Negative value...

Q1：Assume that your portfolio has three stocks. You have $300,000 invested in stock A that is...

Q1：Assume that your portfolio has three stocks. You have $300,000 invested in stock A that is returning 17%, $300, 000 invested in stock B that is returning 16%, and $400,000 invested in stock C that is returning 18%. What is the expected return of your portfolio? Q2: A beta coefficient for a stock of 0.8 implies A. the stock is more risky than the market because an 1% decrease in the stock return will cause the market return to decrease...

1. You have a $30,000 portfolio that consists of equal dollar investments in stocks A, B,...

1. You have a $30,000 portfolio that consists of equal dollar investments in stocks A, B, and C, each with a current price of $25. After one year, stock A is worth $40, stock B is worth $30, and stock C is worth $12.50. You wish to rebalance the portfolio to maintain equal dollar investments in each stock. How many shares of each stock do you buy and/or sell to rebalance the portfolio? A common behavioral hypothesis is that investors...

ou only have four stocks in your portfolio. What will happen to your portfolio if you...

ou only have four stocks in your portfolio. What will happen to your portfolio if you add some randomly selected stocks to it? Question 4 options: a) The diversifiable risk will remain the same but the market risk will rise. b) The diversifiable risk to your portfolio will probably decline while the expected market risk will not change. c) The total portfolio risk should decline along with the expected rate of return, but the market risk will remain unchanged. d)...

Suppose we have the following projections on 3 stocks: You have 2 alternatives: Invest equal amounts...

Suppose we have the following projections on 3 stocks: You have 2 alternatives: Invest equal amounts in all 3 Invest 50% in Stock A and equal amounts in the other 2 State of the Economy Probability of State Return on Stock A Return on Stock B Return on Stock C Boom 40% 10% 15% 20% Bust 60% 8% 4% 0% Which of the following is most accurate? A) Choose Alternative 1 because it has more of Stock C which can...

What is the return on a portfolio composed of the following 5 investments in equal amounts:...

What is the return on a portfolio composed of the following 5 investments in equal amounts: Investment A increased 5%, Investment B increased 12%, Investment C decreased 3%, Investment D increased 0.5% and investment E increased 7%.

Consider the following information on a portfolio of three stocks: &

Consider the following information on a portfolio of three stocks: Rate of Return State of Economy Probability of State Occurring Stock A (%) Stock B (%) Stock C (%) Boom .15 7 15 28 Normal .70 9 12 17 Bust .15 10 2 −35 The portfolio is invested 40 percent in each of Stock A and Stock B and the rest in Stock C. Which of the three stocks has the lowest risk? Why? What is the expected return...

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