K Consider the following six months of returns for two stocks and a portfolio of those two stocks: (Click the icon to view the monthly returns.) Note: The portfolio is composed of 50% of Stock A and 50% of Stock B. a. What is the expected return and standard deviation of returns for each of the two stocks? b. What is the expected return and standard deviation of returns for the portfolio? c. Is the portfolio more or less risky than the two stocks? Why? a. What is the expected return and standard deviation of returns for each of the two stocks? The expected return of Stock A is%. (Round to one decimal place.) Monthly Returns Stock A Stock B Portfolio Jan 2% 0% 1% Feb 5% -3% 1% Print Mar -6% 8% 1% Apr 3% -1% 1% Done May -2% 4% 1% Jun 4% -2% 1% 0 - X

K Consider the following six months of returns for two stocks and a portfolio of those two stocks: (Click the icon to view the monthly returns.) Note: The portfolio is composed of 50% of Stock A and 50% of Stock B. a. What is the expected return and standard deviation of returns for each of the two stocks? b. What is the expected return and standard deviation of returns for the portfolio? c. Is the portfolio more or less risky than the two stocks? Why? a. What is the expected return and standard deviation of returns for each of the two stocks? The expected return of Stock A is%. (Round to one decimal place.) Monthly Returns Stock A Stock B Portfolio Jan 2% 0% 1% Feb 5% -3% 1% Print Mar -6% 8% 1% Apr 3% -1% 1% Done May -2% 4% 1% Jun 4% -2% 1% 0 - X

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

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You own a portfolio that has $1,600 invested in Stock A and $2,700 invested in Stock B. Assume the expected returns on these stocks are 11 percent and 17 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
USE THE FOLLOWING DATA FOR QUESTIONS 4-6: A portfolio is equally invested in Stock A, Stock B, Stock C, and Treasury Bills (25% each). The expected returns of each of these holdings is 4.8%, 11.2%, 18.6%, and 3.0%, respectively. The Betas for each of the stocks is as follows: A 0.4, B 1.8, and C 2.6. Q6: Based on your answers to questions 4 and 5, assuming an expected return of the market of 8.5%, should you invest in this portfolio from a risk/reward perspective? Multiple Choice O O Yes No
If an investor that owns a portfolio with 3 stocks increases their portfolio to 30 stocks, which of the following is MOST LIKELY to happen? Select one: a. risk will increase b. risk would decrease c. Systematic risk would increase d. return would increase
A portfolio is invested 24 percent in Stock G, 39 percent in Stock J, and 37 percent in Stock K. The expected returns on these stocks are 10.5 percent, 13 percent, and 18.4 percent, respectively. What is the portfolio's expected return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Dinesh
A portfolio is invested 45 percent in Stock G, 40 percent in Stock J, and 15 percent in Stock K. The expected returns on these stocks are 11 percent, 9 percent, and 15 percent, respectively. What is the portfolio's expected return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
An investor aims to build a portfolio with annual return equal to 8.88%. In the market only two stocks (A and B) are available, with annual historical returns equal to 9.6% and 7.8% respectively. Assume future returns have the same distribution of past returns. What is the percentage of funds that the investor must allocate to the stock A and B?
You are creating a portfolio of two stocks. The first one has a standard deviation of 18.6% and the second one has a standard deviation of 17.1%. The correlation coefficient between the returns of the two is -0.13. You will invest 36% of the portfolio in the first stock and the rest in the second stock. What will be the standard deviation of this portfolio's returns? Answer in percent, rounded to one decimal place (e.g., 4.32% = 4.3).
None
Consider the following six months of returns for two stocks and a portfolio of those two stocks: (Click the icon to view the monthly returns.) Note: The portfolio is composed of 50% of Stock A and 50% of Stock B. a. What is the expected return and standard deviation of returns for each of the two stocks? b. What is the expected return and standard deviation of returns for the portfolio? c. Is the portfolio more or less risky than the two stocks? Why? a. What is the expected return and standard deviation of returns for each of the two stocks? The expected return of Stock A is 0%. (Round to one decimal place.) The expected return of Stock B is 1%. (Round to one decimal place.) The standard deviation of Stock A is 0.04195. (Round to five decimal places.) (Round to five decimal places.) The standard deviation of Stock B is Monthly Returns Stock A Stock B Portfolio Jan 1% 0% 0.5% Feb 4% - 3% 0.5% D Mar -7% 8% ..... 0.5% Apr 2% - 1% 0.5% May - 3% 4% 0.5% Jun 3% - 2% 0.5% WOCHE X ans
Consider the following table, which gives a security analyst’s expected return on two stocks and the market index in two scenarios: Scenario Probability Market Return Aggressive Stock Defensive Stock 1 0.5 6% 2.0% 5.0% 2 0.5 20 32 15 Required: a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) b. What is the expected rate of return on each stock?
1. A stock has a beta of 1.15 and an expected return of 14 percent. A risk-free asset Currently earns 4.2 percent. a . What is expected return on a portfolio that is equally in inverted assets? b. if portfolio of the two assets has beta of 75, what are the portfolio weights? C. if a portfolio of the two assets has an expected return of 8 percent .what is its beta? the two

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