Question

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.)

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
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.).
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
Assume Stocks A and B have the following characteristics: Stock Expected Return Standard Deviation A 8.3%...
Assume Stocks A and B have the following characteristics: Stock Expected Return Standard Deviation A 8.3% 32.3% B 14.3% 61.3% The covariance between the returns on the two stocks is .0027. a. Suppose an investor holds a portfolio consisting of only Stock A and Stock B. Find the portfolio weights, XA and XB, such that the variance of her portfolio is minimized. (Hint: Remember that the sum of the two weights must equal 1.) (Do not round intermediate calculations and...
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...
Asset K has an expected return of 19 percent and a standard deviation of 34 percent....
Asset K has an expected return of 19 percent and a standard deviation of 34 percent. Asset L has an expected return of 7 percent and a standard deviation of 18 percent. The correlation between the assets is 0.43. What are the expected return and standard deviation of the minimum variance portfolio? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Expected return% Standard deviation%
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.
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...
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?
The following information is available for two stocks: Stock Shares Price per share Expected Return Standard...
The following information is available for two stocks: Stock Shares Price per share Expected Return Standard Deviation A 500 $40 14% 18% B 400 $25 21% 22% You are fully invested in the two stocks. The correlation coefficient between the two stock returns is .80 a. Compute the weights of the two stocks in your portfolio. b. Compute the portfolio expected return. c. Compute the portfolio standard deviation. d. You consider selling 250 shares of stock A, and buy with...
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....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT