The standard deviation of Nvidia's stock return is 14.004%. For AMD it is 17.035% and for the market it is 5.055%. Thecorrelations between the three are shown in the table below:Correlation TableMarketNVIDIAAMDMarket1.0000NVIDIAAMD0.65170.61931.00000.66461.0000You form a portfolio with 40% of the money in Nvidia stock and 60% in AMD. What is the standard deviation on thisportfolio? Enter your answer as a % accurate to two decimal places (do not enter a % symbol or any other punctuation).Add your answerInteger, decimal, or E notation allowed

Answered: The standard deviation of Nvidia's…

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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Suppose the risk-free return is 5.3% and the market portfolio has an expected return of 10.2% and a standard deviation of 16%. Loblaw Companies Limited stock has a beta of 0.32. What is its expected return? The expected return is%. (Enter your response as a percent rounded to two decimal places.)
1. The following table presents the expected returns of three stocks and the risk free rate. в 4% Stock A 8% Expected return What is the expected return and risk on an equally weighted portfolio composed of these four assets? The standard deviation of stock A is 10% and the covariance between A and B equals 0.0045. The correlation matrix between A, B and C is: 14% 4% Correl B A 1 0.3 0.7 B 0.3 0.5 0.5 Combining stocks A and C in a portfolio in equal proportions will result in a variance of 1.95%. 0.7
Assume the return on a market index represents the common factor and all stocks in the economy have a beta of 1. Firm-specific returns all have a standard deviation of 31%. Suppose an analyst studies 20 stocks and finds that one-half have an alpha of 2.0%, and one-half have an alpha of –2.0%. The analyst then buys $1.1 million of an equally weighted portfolio of the positive-alpha stocks and sells short $1.1 million of an equally weighted portfolio of the negative-alpha stocks. Required: a. What is the expected profit (in dollars), and what is the standard deviation of the analyst’s profit? (Enter your answers in dollars not in millions. Do not round intermediate calculations. Round your answers to the nearest dollar amount. b-1. How does your answer for standard deviation change if the analyst examines 50 stocks instead of 20?
The covariance between the returns on Zion shares and the returns on the ASX200 market index is 0.0112. The standard deviation of the returns on ASX200 is 14%. The standard deviation of the returns on Zion shares is 10%. What is the beta of Zion shares? Group of answer choices0.57 0.16 0.55 0.08 1.12
Ahmed observed the following data of two stocks as shown in the below table. Which stock do you advise Ahmed to select according to the required rate of return? And explain why? Stock A Stock B Market Standard Deviation Return 30% 30% 22% Correlation Coefficient between A & M -30% Correlation Coefficient between B & M 30% Expected Market Return 11% Risk-Free rate of return 5%
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
The following are estimates for two stocks. Firm- Specific Expected Standard Stock Return Beta Deviation A 14% 0.90 30% B 21 1.40 42 The market index has a standard deviation of 20% and the risk-free rate is 7%. Required: a. What are the standard deviations of stocks A and B? b. Suppose that we were to construct a portfolio with proportions: Stock A Stock B T-bills 0.30 0.45 0.25 Compute the expected return, beta, nonsystematic standard deviation, and standard deviation of the portfolio.
You have been scouring PSE Edge looking for stocks that are “good values” and have calculated expected returns for five stocks. Assume that the risk-free rate is 7% and the market return is 9%. Which security would be the best investment? Choose the (1) expected return, and (2) beta of that best investment. (1) 8.01%; (2) 1.70 (1) 7.06%; (2) 0.00 (1) 4.04%; (2) -0.67 (1) 10.55%; (2) 2.50
Give typing answer with explanation and conclusion
man.1 The standard deviation for Stock A is 13.01%. The standard deviation for the market is 15.65%. The Correlation Coefficient of Stock A and the market is .5526. Calculate the Beta for Stock A.
Suppose that stock market returns are normally distributed with a mean of 7% and a standard deviation of 20%. There should be about a 2.5% chance of getting a return greater than %. Write your answer as a whole number: eg, 28% = 28.
Consider the following expected returns, volatilities, and correlations: Stock Duke Energy Microsoft Wal-Mart Expected Standard Correlation with Correlation with Correlation with Return Duke Energy Deviation 14% 6% 44% 24% 23% 14% 1.0 -1.0 0.0 Microsoft -1.0 1.0 0.7 Wal-Mart 0.0 0.7 1.0 a) Consider a portfolio consisting of only Duke Energy and Microsoft. What is the percentage of your investment (portfolio weight) that you would place in Duke Energy stock to achieve a risk-free investment. b) What are the expected return and volatility of a portfolio that consists of a long position of $10,000 in Wal-Mart and a short position of $2000 in Microsoft? c) What are the expected return and platility of a portfolio that has $3000 invested in Duke Energy, $4000 invested in Microsoft, and $3000 invested in Walmart stock?

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