Problem 11-12 Portfolio Variance (LO2, CFA4) Use the following information to calculate the expected return and standard deviation of a portfolio that is 70 percent investe Doors, Incorporated, and 30 percent invested in Down Company: Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Expected return, E(R) Standard deviation, o Correlation 3 Doors, Incorporated 12% 42 8.27 Down Company 12% 44

Problem 11-12 Portfolio Variance (LO2, CFA4) Use the following information to calculate the expected return and standard deviation of a portfolio that is 70 percent investe Doors, Incorporated, and 30 percent invested in Down Company: Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Expected return, E(R) Standard deviation, o Correlation 3 Doors, Incorporated 12% 42 8.27 Down Company 12% 44

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

See similar textbooks

Similar questions

QUESTION 2 The following table contains data on the returns of stock A and stock B from 2021 to 2024: Year 2021 2022 2023 2024 Return on stock A 6 8 10 12 Return on stock B 13 10 14 11 1. Compute the mean return on stock A and the mean return on stock B; 2. Compute the variance of the return on stock A and the variance of the return on stock B; 8. Compute the standard deviation of the return on stock A and the standard deviation of the return on stock B; 4. Compute the coefficient of variation of the return on stock A and stock B; 5. Compute RRC for stock A and stock B (Hint: RRC = Mean Return/Standard Deviation); 6. Would you invest in Stock A or Stock B? Why?
4.3% 3.38 LON LIN 2.ON Portfolio Opportunity Set ADN Min Risk ORP KOOS GOOG AMIN D. All portfolios from "Min.Risk" to "ORP" E. All portfolios from "Min. Risk" to AMZN 10.00% COON St Dav 6. On the graph above, which portfolio(s) would be considered to be efficient? A. Only portfolio AMZN B. Only portfolio ORP C. All portfolios from ORP to AMZN SEAN
Question 1. Calculate the variance and standard deviation of a portfolio of two stocks. Question 2. Suppose the volatility of stock 2 is 16%, but the weight of stock 2 in the portfolio is 15%, will there be any effect on the standard deviation of the portfolio?
Return rate
Problem 9-21 Risk, Return, and Their Relationship (LG9-3, LG9-4)Consider the following annual returns of Estee Lauder and Lowes Companies: Estee LauderLowes CompaniesYear 123.9%6.0%Year 224.016.6Year 318.14.7Year 450.444.0Year 517.314.0Compute each stocks average return, standard deviation, and coefficient of variation.Note: Round your answers to 2 decimal places.
hi, i need answer for requirement a2. thanksss
Detailed steps pls all parts or skip
aa.3
Problem 8-14 Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 4.0% +0.50RM + eA RB = -1.2% + 0.70RM + eB OM 17%; R-squareд = 0.26; R-squareg = 0.18 Assume you create a portfolio Q, with investment proportions of 0.40 in a risky portfolio P, 0.35 in the market index, and 0.25 in T-bill. Portfolio Pis composed of 70% Stock A and 30% Stock B. a. What is the standard deviation of portfolio Q? (Calculate using numbers in decimal form, not percentages. Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Standard deviation 10.98 c. What is the "firm-specific" risk of portfolio Q? (Calculate using numbers in decimal form, not percentages. Do not round intermediate calculations. Round your answer to 4 decimal places.) Firm-specific % Answer is complete but not entirely correct. 0.0025 x
Question 13 of 19 A portfolio consists of 40 percent Stock A and 60 percent Stock B. Stock A has a Beta of 1.2, an expected return of 0.09, and a variance of 0.10. Stock B has a Beta of 0.8, an expected return of 0.09, and a variance of 0.07. The covariance of returns between Stocks A and B is 0.20. What is the standard deviation of the portfolio? O 0.3704 O 0.3152 O 0.2266 O 0.2987 O None of the listed choices is correct.
You decide to invest in a portfolio consisting of 24 percent Stock A, 50 percent Stock B, and the remainder in Stock C. Based on the following information, what is the variance of your portfolio? state of Economy Recession Normal Boon Multiple Choice 00842 01137 00783 00884 00951 Probability of State of Economy .117 .671 .212 Return if State Occurs Stock A -10.40% 9.70% 21.61% Stock B. Stock C -3.80% -12.80% 10.72% 17.20% 25.23% 29.93%
Digital Executive Cheese Fruit January +14 +7 February -3 +1 March +5 +4 April +7 +13 May -4 +2 June +3 +5 July -2 -3 August -8 -2 Required: a-1. Calculate the variance and standard deviation of each stock. a-2. Which stock is riskier if held on its own? b. Now calculate the returns in each month of a portfolio that invests an equal amount each month in the two stocks. c. Is the variance more or less than halfway between the variance of the two individual stocks? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C Now calculate the returns in each month of a portfolio that invests an equal amount each month in the two stocks. Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. Month January February March April May June July August Portfolio Return

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS