Mr. Jones has a 2-stock portfolio with a total value of $550,000. $185,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 19.10%, Stock B is 8.95%, and correlation between Stock A and Stock B is –0.90, what would be the expected risk on Mr. Jones’ portfolio (standard deviation of the portfolio return)? Calculate with at least 4 decimal places and round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72. A. 3.31% B. 2.80% C. 2.16% D. 3.14% E. 3.00%
Mr. Jones has a 2-stock portfolio with a total value of $550,000. $185,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 19.10%, Stock B is 8.95%, and correlation between Stock A and Stock B is –0.90, what would be the expected risk on Mr. Jones’ portfolio (standard deviation of the portfolio return)? Calculate with at least 4 decimal places and round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72. A. 3.31% B. 2.80% C. 2.16% D. 3.14% E. 3.00%
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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Mr. Jones has a 2-stock portfolio with a total value of $550,000. $185,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 19.10%, Stock B is 8.95%, and correlation between Stock A and Stock B is –0.90, what would be the expected risk on Mr. Jones’ portfolio (standard deviation of the portfolio return)?
Calculate with at least 4 decimal places and round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72.
Calculate with at least 4 decimal places and round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72.
A. 3.31%
B. 2.80%
C. 2.16%
D. 3.14%
E. 3.00%
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