Ebenezer Scrooge has invested 50% of his money in share A and the remainder in share B. He assesses their prospects as follows: Expected return (%) Standard deviation (X). Correlation between returns A 16 23 Required A a. What are the expected return and standard deviation of returns on his portfolio? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. b. How would your answer change if the correlation coefficient were 0 or -0.40? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. c. Is Mr. Scrooge's portfolio better or worse than one invested entirely in share A, or is it not possible to say? 0.4 Complete this question by entering your answers in the tabs below. Required B Required C Expected return Standard deviation B 21 28 What are the expected return and standard deviation of returns on his portfolio? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. 18,50 % %
Ebenezer Scrooge has invested 50% of his money in share A and the remainder in share B. He assesses their prospects as follows: Expected return (%) Standard deviation (X). Correlation between returns A 16 23 Required A a. What are the expected return and standard deviation of returns on his portfolio? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. b. How would your answer change if the correlation coefficient were 0 or -0.40? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. c. Is Mr. Scrooge's portfolio better or worse than one invested entirely in share A, or is it not possible to say? 0.4 Complete this question by entering your answers in the tabs below. Required B Required C Expected return Standard deviation B 21 28 What are the expected return and standard deviation of returns on his portfolio? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. 18,50 % %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
am. 234.
Transcribed Image Text:Ebenezer Scrooge has invested 50% of his money in share A and the remainder in share B. He assesses their prospects as follows:
Expected return (%)
Standard deviation (%)
Correlation between returns
A
16
23
Required A
a. What are the expected return and standard deviation of returns on his portfolio?
Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
b. How would your answer change if the correlation coefficient were 0 or -0.40?
Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
c. Is Mr. Scrooge's portfolio better or worse than one invested entirely in share A, or is it not possible to say?
8.4
Complete this question by entering your answers in the tabs below.
Required B Required C
Expected return
Standard deviation
B
21
28
What are the expected return and standard deviation of returns on his portfolio?
Note: Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
18.50 %
%
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