Question

Honeywell (HON) and United Technologies Inc. (UTI) are two leading aerospace defense contractors. HON has an...

Honeywell (HON) and United Technologies Inc. (UTI) are two leading aerospace defense contractors. HON has an expected return of 16% and a standard deviation of 52%. UTI has an expected return of 13% and a standard deviation of 48%. The correlation between the two companies is .65. Determine the weights of the minimum variance portfolio? Also, calculate the expected return and the standard deviation of the minimum variance portfolio.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Honeywell (HON) and United Technologies Inc. (UTI) are two leading aerospace defense contractors.  HON has an expected...
Honeywell (HON) and United Technologies Inc. (UTI) are two leading aerospace defense contractors.  HON has an expected return of 16% and a standard deviation of 52%. UTI has an expected return of 13% and a standard deviation of 48%. The correlation between the two companies is .65. Determine the weights of the minimum variance portfolio? Also, calculate the expected return and the standard deviation of the minimum variance portfolio.
The stock of Bruin, Inc., has an expected return of 22 percent and a standard deviation...
The stock of Bruin, Inc., has an expected return of 22 percent and a standard deviation of 37 percent. The stock of Wildcat Co. has an expected return of 12 percent and a standard deviation of 52 percent. The correlation between the two stocks is .49. Calculate the expected return and standard deviation of the minimum variance portfolio.
What is the standard deviation for the following portfolio? The portfolio has weights of 0.25 and...
What is the standard deviation for the following portfolio? The portfolio has weights of 0.25 and 0.75 on stocks A and B, respectively. The correlation between stock A and B is 0.4. The variance for each stock was computed by using rates of returns and not percentages. (Round your answer to two decimal digits) Stocks Expected return Variance A 17% 0.0169 B 13% 0.0361
Assume the following statistics for two companies:  Blue Plc. and Purple Plc Blue Plc. Purple Plc Average...
Assume the following statistics for two companies:  Blue Plc. and Purple Plc Blue Plc. Purple Plc Average return 17.50% 30.00% Variance 0.05 0.17 Standard deviation 22.36% 41.23% Correlation 0.5 Portfolio weights % in Blue Plc. 50% % in Purple Plc. 50% i. Calculate the covariance between the two shares ii. Calculate the expected portfolio return and portfolio variance
Drew can design a risky portfolio based on two risky assets, Origami and Gamiori. Origami has...
Drew can design a risky portfolio based on two risky assets, Origami and Gamiori. Origami has an expected return of 13% and a standard deviation of 20%. Gamiori has an expected return of 6% and a standard deviation of 10%. The correlation coefficient between the returns of Origami and Gamiori is - 0.20 (negative 0.20). The risk-free rate of return is 2%. Among all possible portfolios constructed from Origami and Gamiori, what is the minimum variance?
Stock 1 has a expected return of 14% and a standard deviation of 12%. Stock 2...
Stock 1 has a expected return of 14% and a standard deviation of 12%. Stock 2 has a expected return of 11% and a standard deviation of 11%. Correlation between the two stocks is 0.5. Create a minimum variance portfolio with long positions in both stocks. What is the return on this portfolio?
Problem 11-18 Minimum Variance Portfolio (LO4, CFA4) Asset K has an expected return of 14 percent...
Problem 11-18 Minimum Variance Portfolio (LO4, CFA4) Asset K has an expected return of 14 percent and a standard deviation of 33 percent. Asset L has an expected return of 8 percent and a standard deviation of 14 percent. The correlation between the assets is 0.52. What are the expected return and standard deviation of the minimum variance portfolio?
1-You are evaluating two stocks, United Technologies, Inc. (UT) and Bigalow Giant Corporation (BG). You have...
1-You are evaluating two stocks, United Technologies, Inc. (UT) and Bigalow Giant Corporation (BG). You have done research on both of these companies, and have come up with the following data: UT BG Scenario Probability Return Return Strong 25% 20% 16% Normal 50% 10% 10% Weak 25% -5% 5% Based on this information, what is the Expected Return for UT (Round your answer to two decimal points? 2-You are evaluating two stocks, United Technologies, Inc. (UT) and Bigalow Giant Corporation...
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 14% and a standard deviation of return of 26%. Stock B has an expected return of 9% and a standard deviation of return of 11%. The correlation coefficient between the returns of A and B is .5. The risk-free rate of return is 5%. The proportion of the optimal risky portfolio that should be invested in stock B is...
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.)
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT