he investor invested in stocks and bonds to form a minimum variance portfolio. The return and standard deviation is as follows:   Expected Return Standard deviation Stock 14% 40% Bond 8% 30%   The correlation between returns of the stock and bond is 0.06. Calculate the minimum variance portfolio's standard deviation.

Q: You are going to invest in Asset J and Asset S. Asset J has an expected return of 13.6 percent and a…

A: ParticularsExpected ReturnStandard DeviationAsset J13.6%54.6%Asset S10.6%19.6%Correlation between…

Q: The market portfolio has an expected return of 11.5 percent and a standard deviation of 19 percent.…

A: Data given:: Standard deviation of well diversified portfolio = 9% Standard deviation of a market…

Q: Asset Y has a standard deviation of 20% and a correlation with the market of .65. Asset Z has a…

A: Beta of a stock= Correlation between stock and market*Standard deviation of stock /Standard…

Q: Assume your portfolio standard deviation is 8 whereas the market has a standard deviation of 6.8.…

A: First we need to determine the systematic risk using the formula below:

Q: If a portfolio had a return of 11%, the risk-free asset return was 6%, and the standard deviation of…

A: Risk premium = Portfolio Return - Risk free Asset Return

Q: An investor can design a risky portfolio based on two stocks, A and B. The standard deviation of…

A: The question is based on the concept of Minimum variance portfolio. A minimum variance portfolio is…

Q: Suppose you have a portfolio consisting of two assets, A and B. Stock A has an expected return of…

A: Portfolio variance = w12σ12 + w22σ22 + 2w1w2Cov1,2Where:w1 = the portfolio weight of the first…

Q: of

A: Formula for correlation coefficient is: Corrwlation coefficient = Cov(A, B)/SD of A*SD of B Cov(A,B)…

Q: A portfolio has three stocks. Their portfolio weights and expected returns are as follows.…

A: The expected return on a portfolio indicates the overall expected return from the portfolio. The…

Q: The sample mean of stock market returns is 11%. The sample standard deviation of stock market…

A: Sharpe ratio is calculated as follows:-Sharpe ratio = whereRm = stock market returnRf =risk free…

Q: Stocks A and B have a correlation coefficient of –0.8. The stocks' expected returns and standard…

A: Standard deviation is a variation in the mean value of given data. Standard deviation is a…

Q: A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 15%…

A: Investors often diversify their investment portfolios by including multiple assets to reduce risk.…

Q: Let r be the expected return of stock i, rRE represent the risk-free rate, b represent the Beta of a…

A: Capital Asset Pricing Model: The CAPM explains the relationship between expected return and…

Q: A portfolio is made up of share A and share B. Share A has a standard deviation of 16% and has a…

A: Rate of return of the portfolio is the average rate of return of each security comprised in the…

Q: The correlation coefficient between stock B and the market portfolio is 0.8. The standard deviation…

A: In this question, we are required to determine the beta of the stock.

Q: An investment portfolio has 45% invested in stock A and 55% invested in stock B. The standard…

A: Weight of Stock A = Wa = 45% or 0.45Weight of Stock A = Wb = 55% or 0.55Standard deviation of Stock…

Q: stock has a beta of 2.0. The correlation of the stock’s returns with the market is 0.5 and the…

A: The provided information are: Beta coefficient = 2.0 Correlation coefficient = 0.5  Variance of the…

Q: The securities of firms A and B have the expected return and standard deviations given below. The…

A: Standard deviation = Sqroot of variance   Portfolio variance  = w12σ12 + w22σ22 + 2w1w2 σ1 σ2 r12…

Q: The following are estimates for two stocks. Stock A B Expected Return 0.16 0.19 Beta 0.84 1.23…

A:

Q: 3. As a financial analyst, you are tasked with finding the price per share of XYZ, a telecom…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Suppose Stock A has an expected return of 15%, a standard deviation of 20%, and a Beta of 0.4 while…

A: The desired gain and the standard deviation are the two different methods that are used to analyze…

Q: What is the expected return on the minimum variance portfolio created using the two stocks?

A: The minimum variance portfolio is a portfolio that has been thoughtfully put together with the goal…

Q: consider a portfolio composed of five securities. All the securities have a beta of 1.0 and unique…

A: Portfolio = 5 securitiesBeta = 1 Standard deviation = 25% = 0.25 Portfolio distributes weight…

Q: Using the data in the following table,, and the fact that the correlation of A and B is 0.81,…

A: Sure, the volatility (standard deviation) of a portfolio that is 65% invested in stock A and 35%…

Q: An investor can design a risky portfolio based on two stocks, A and B. The standard deviation of…

A: The weights of assets A & B in minimum variance portfolio is given by the expressions below. The…

Q: Consider the following two portfolios. Portfolio A has an expected return of 9%, a standard…

A: The objective of the question is to find the beta of Portfolio B using the Capital Asset Pricing…

Q: Table 1 shows the value of a portfolio consisting of security 1 and security 2. The respective…

A: Standard deviation is a statistical measurement of deviation from the expected data. It shows market…

Q: A portfolio was created by investing 34% of the funds in Stock A (Variance = 0.06%) and the balance…

A: Given: Particulars Stock A Stock B Standard deviation   0.80% Weight 34% 66% Correlation…

Q: Consider an equally weighted portfolio that contains 80 stocks. If the average volatility of these…

A: Average Volatility = 35% Average Correlation = 0.4   Equally Weighted Portfolio of 80 stocks

Q: Assume that the average variance of return for an individual security is 50 and that the average…

A: Average variance of individual security is 50 Average covariance is 10

Q: Stocks A, B, and C have the same expected return and standard deviation. The following table shows…

A: Portfolio:A portfolio is a collection of financial assets, such as stocks, bonds, and other…

Q: A portfolio was created by investing 38% of the funds in Stock A (Variance = 6.25%) and the balance…

A: The weightage of stock A, WA is 38% The variance of stock A, σ2A is 6.25% The Weightage of Stock B,…

Q: Rank the following three stocks by their risk-return relationship, from best to worst: Stock A has…

A: The presentation of the ratio of the standard deviation of the project and the average return of a…

Q: 9. A portfolio is composed of two stocks, Stock A and B. The standard deviation of return for Stock…

A: The correlation between two random variables will always lie between -1 and 1, and is a measure of…

Q: Suppose the risk-free return is 2.5% and the market portfolio has an expected return of 6.2% and a…

A: Risk-free return =2.5%  Expected return on market portfolio = 6.2% The standard deviation of market…

Q: d. Explain why the portfolio has a lower volatility than the average volatility of the two stocks.…

A: A Portfolio is combination of different tradable securities. Creating portfolio reduces…

Q: An individual common stock has a beta of 0.9 and a correlation coefficient of 0.9. The expected…

A:

Q: You have a portfolio P that consists of 50% Stock X and 50% Stock Y. Stock X has a beta of 0.7 and…

A: Given,  The portfolio has stock X and stock Y.  The beta of stock X is 0.7 and the beta of stock Y…

Q: estimate the standard deviations of Stocks A and B. Then, compute the expected return, standard…

A: a) Standard deviation of A= (Beta2*Market SD2+Firm-specific SD2)(1/2)…

Q: Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 31…

A: Weight of stock in minimum variance portfolio is calculated by this formula. sigma stands for…