Here are some historical data on the risk characteristics of Ford and Harley Davidson: Harley Davidson Ford 1.21 Beta 0.68 Yearly standard deviation of return 32 16.2 (%) Assume the standard deviation of the return on the market was 11.0%. The correlation coefficient of Ford's return versus Harley Davidson is 0.39. Question: What is the standard deviation of a portfolio invested one-third in Ford, one-third in Harley Davidson, and one-third in risk-free Treasury bills? Multiple Choice O O O о O 11.1% 16.9% 22.2% 20.1% 13.6%
Here are some historical data on the risk characteristics of Ford and Harley Davidson: Harley Davidson Ford 1.21 Beta 0.68 Yearly standard deviation of return 32 16.2 (%) Assume the standard deviation of the return on the market was 11.0%. The correlation coefficient of Ford's return versus Harley Davidson is 0.39. Question: What is the standard deviation of a portfolio invested one-third in Ford, one-third in Harley Davidson, and one-third in risk-free Treasury bills? Multiple Choice O O O о O 11.1% 16.9% 22.2% 20.1% 13.6%
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
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
Transcribed Image Text:Here are some historical data on the risk characteristics of Ford and Harley Davidson:
Harley Davidson
Ford
1.21
Beta
0.68
Yearly standard deviation of return 32
16.2
(%)
Assume the standard deviation of the return on the market was 11.0%.
The correlation coefficient of Ford's return versus Harley Davidson is 0.39.
Question: What is the standard deviation of a portfolio invested one-third in Ford, one-third in Harley Davidson, and one-third in risk-free Treasury bills?
Multiple Choice
O
O
O
11.1%
16.9%
22.2%
20.1%
13.6%
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