Question

Consider a portfolio that contains two stocks. Stock "A" has an expected return of 15% and...

Consider a portfolio that contains two stocks. Stock "A" has an expected return of 15% and a standard deviation of 18%. Stock "B" has an expected return of -1% and a standard deviation of 25%. The proportion of your wealth invested in stock "A" is 50%. The correlation between the two stocks is -0.1.

What is the expected return of the portfolio? Enter your answer as a percentage. Do not include the percentage sign in your answer.

Enter your response below rounded to 2 DECIMAL PLACES.
  

What is the standard deviation of the portfolio? Enter your answer as a percentage. Do not include the percentage sign in your answer.

Enter your response below rounded to 2 DECIMAL PLACES.

Homework Answers

Answer #1

Calculations-

Please upvote if the ans is helpful.In case of doubt,do comment.Thanks.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You are creating a portfolio of two stocks. Pear Inc. has expected return of 15% and...
You are creating a portfolio of two stocks. Pear Inc. has expected return of 15% and standard deviation of 30%. InstaCafe Inc. has expected return of 13% and standard deviation of 40%. The two stocks' covariance is -0.036 and the risk free rate is 2%. What percentage of the Optimal Risky Portfolio will be invested in Pear Inc? Provide your answer in percent rounded to two decimals, omitting the % sign.
Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation...
Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 25 percent, and Stock I, an international company, with an expected return of 6 percent and a standard deviation of 16 percent. The correlation between the two stocks is −.14. What are the expected return and standard deviation of the minimum variance portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Consider two stocks, Stock D, with an expected return of 11 percent and a standard deviation...
Consider two stocks, Stock D, with an expected return of 11 percent and a standard deviation of 26 percent, and Stock I, an international company, with an expected return of 9 percent and a standard deviation of 19 percent. The correlation between the two stocks is –0.12. What are the expected return and standard deviation of the minimum variance portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.).
You have a three-stock portfolio. Stock A has an expected return of 11 percent and a...
You have a three-stock portfolio. Stock A has an expected return of 11 percent and a standard deviation of 41 percent, Stock B has an expected return of 15 percent and a standard deviation of 59 percent, and Stock C has an expected return of 13 percent and a standard deviation of 41 percent. The correlation between Stocks A and B is .30, between Stocks A and C is .20, and between Stocks B and C is .05. Your portfolio...
Consider the following two stocks. Consider the following two stocks. Probabilities (pi ) Stock "A" Stock...
Consider the following two stocks. Consider the following two stocks. Probabilities (pi ) Stock "A" Stock "B" Recession p1= 34% -3% 1% Normal p2= 21% 3% -11% Boom p3= 45% 14% 22% The portfolio weights for stocks "A" and "B" are 0.35 and 0.65, respectively. What are the expected returns of stock "A" and "B"? Enter your answers as a percentage. Do not put the percent sign in your answers. Round your answers to 2 DECIMAL PLACES. E(ra)=      Correct response:...
There are two stocks in the market, Stock A and Stock B . The price of...
There are two stocks in the market, Stock A and Stock B . The price of Stock A today is $85. The price of Stock A next year will be $74 if the economy is in a recession, $97 if the economy is normal, and $107 if the economy is expanding. The probabilities of recession, normal times, and expansion are .30, .50, and .20, respectively. Stock A pays no dividends and has a correlation of .80 with the market portfolio....
An investor can design a risky portfolio based on two stocks, A and B. Stock A...
An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 21% and a standard deviation of return of 39%. Stock B has an expected return of 14% and a standard deviation of return of 20%. The correlation coefficient between the returns of A and B is .35. The risk-free rate of return is 5%. The standard deviation of returns on the optimal risky portfolio is _________. When solving this...
Use the following information to calculate the expected return and standard deviation of a portfolio that...
Use the following information to calculate the expected return and standard deviation of a portfolio that is 50 percent invested in 3 Doors, Inc., and 50 percent invested in Down Co.: (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) 3 Doors, Inc. Down Co.   Expected return, E(R) 14 % 12 %   Standard deviation, σ 44 46   Correlation .29         Expected return %   Standard deviation...
Consider two stocks, Stock D with an expected return of 11 percent and a standard deviation...
Consider two stocks, Stock D with an expected return of 11 percent and a standard deviation of 26 percent and Stock I, an international company, with an expected return of 9 percent and a standard deviation of 19 percent. The correlation between the two stocks is -.12. What is the weight of each stock in the minimum variance portfolio? (Round your answer to 4 decimal places.) Weight of Stock D Weight of Stock I
14. Stock A has a beta of 1.95 and a standard deviation of return of 42%....
14. Stock A has a beta of 1.95 and a standard deviation of return of 42%. Stock B has a beta of 3.75 and a standard deviation of return of 70%. Assume that you form a portfolio that is 60% invested in Stock A and 40% invested in Stock B. Using the information in question 13, according to CAPM, what is the expected rate of return on your portfolio? Enter your answer rounded to two decimal places. Question 13 for...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT