The expected return of Waterway is 19.3 percent, and the expected return of Wildhorse is 24.3 percent. Their standard deviations are 13.3 percent and 21.3 percent, respectively. If a portfolio is composed of 40 percent Waterway and the remainder Wildhorse, calculate the expected return and the standard deviation of the portfolio, given a correlation coefficient between Waterway and Wildhorse of 0.35. (Round intermediate calculations to 4 decimal places, e.g. 31.2125 and final answers to 2 decimal places, e.g. 15.25%.) The expected return Standard deviation of portfolio 22.30 % 44.50 % Calculate the standard deviation if the correlation coefficient is -0.35. (Do not round intermediate calculations. Round answer to 2 decimal places, e.g. 15.25%.) Standard deviation of portfolio -37.14 %
The expected return of Waterway is 19.3 percent, and the expected return of Wildhorse is 24.3 percent. Their standard deviations are 13.3 percent and 21.3 percent, respectively. If a portfolio is composed of 40 percent Waterway and the remainder Wildhorse, calculate the expected return and the standard deviation of the portfolio, given a correlation coefficient between Waterway and Wildhorse of 0.35. (Round intermediate calculations to 4 decimal places, e.g. 31.2125 and final answers to 2 decimal places, e.g. 15.25%.) The expected return Standard deviation of portfolio 22.30 % 44.50 % Calculate the standard deviation if the correlation coefficient is -0.35. (Do not round intermediate calculations. Round answer to 2 decimal places, e.g. 15.25%.) Standard deviation of portfolio -37.14 %
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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Transcribed Image Text:The expected return of Waterway is 19.3 percent, and the expected return of Wildhorse is 24.3 percent. Their standard deviations are
13.3 percent and 21.3 percent, respectively. If a portfolio is composed of 40 percent Waterway and the remainder Wildhorse,
calculate the expected return and the standard deviation of the portfolio, given a correlation coefficient between Waterway and
Wildhorse of 0.35. (Round intermediate calculations to 4 decimal places, e.g. 31.2125 and final answers to 2 decimal places, e.g. 15.25%.)
The expected return
Standard deviation of portfolio
22.30 %
44.50
%
200
Calculate the standard deviation if the correlation coefficient is -0.35. (Do not round intermediate calculations. Round answer to 2 decimal
places, e.g. 15.25%.)
Standard deviation of portfolio
-37.14 %
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