Nikulbhai The table below shows standard deviations and correlation coefficients for seven stocks from different countries. Calculate thevariance of a portfolio with equal investments in each stock. (Use decimals, not percents, in your calculations. Do not roundintermediate calculations. Round your answer to 4 decimal places.)BHPToronto DominionBHP BillitonSiemensNestléBilliton Siemens Nestlé1.00LVMHBankSamsungBP0.330.420.360.200.360.141.000.350.200.140.32-0.121.000.150.160.080.16LVMHToronto Dominion BankSamsungBP1.000.160.300.041.00-0.010.011.000.021.00Standard deviation (%)35.1027.9021.8030.4024.7035.5030.60Portfolio variance

Portfolio Variance Explained: Diversification in ActionThis process calculates the overall risk,…

Answered: The table below shows standard…

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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Syntex, Inc. is considering an investment in one of two common stocks. Given the information that follows, which investment is better, based on the risk (as measured by the standard deviation) and return? Common Stock A Common Stock B Probability Return Probability Return 0.25 13% 0.25 −7% 0.50 14% 0.25 7% 0.25 18% 0.25 16% 0.25 23% (Click on the icon in order to copy its contents into a spreadsheet.) Question content area bottom Part 1 a. Given the information in the table, the expected rate of return for stock A is enter your response here %. (Round to two decimal places.) Part 2 The standard deviation of stock A is enter your response here %. (Round to two decimal places.) Part 3 b. The expected rate of return for stock B is enter your response here %. (Round to two decimal places.) Part 4 The standard deviation for stock B is enter…
The table below shows standard deviations and correlation coefficients for seven stocks from different countries. Calculate the variance of a portfolio with equal investments in each stock. (Use decimals, not percents, in your calculations. Do not round intermediate calculations. Round your answer to 4 decimal places.) BHP Billiton Siemens Toronto Dominion Nestlé LVMH Bank Samsung BP BHP Billiton Siemens 1.00 0.31 0.37 0.45 0.21 0.45 0.15 1.00 0.29 0.21 0.15 0.30 0.24 Nestlé 1.00 0.20 0.21 0.13 0.21 LVMH 1.00 0.11 0.25 0.09 Toronto Dominion Bank Samsung 1.00 -0.06 0.06 1.00 0.07 BP 1.00 Standard deviation (%) 30.10 22.90 16.80 25.40 19.70 30.50 25.60 Portfolio variance
Need all
Suppose you manage an equity fund with the following securities. Use the following data to calculate the information ratio of each stock. Input Data Vogt Industries Isher Corporation Hedrock, Incorporated Alpha 0.012 0.006 0.016 Beta 0.277 1.015 1.630 Standard Deviation 0.156 0.168 0.181 Residual Standard Deviation 0.117 0.048 0.113 Required: Using the information in the table above, please calculate the information ratio for each stock. (Use cells A5 to D8 from the given information to complete this question.) Vogt Industries Isher Corporation Hedrock, Incorporated Information Ratio
The table below shows standard deviations and correlation coefficients for seven stocks from different countries. Calculate the variance of a portfolio with equal investments in each stock. (Use decimals, not percents, in your calculations. Do not round intermediate calculations. Round your answer to 4 decimal places.) BHP Billiton Siemens Nestlé LVMH Toronto Dominion Bank Samsung BP BHP Billiton 1.00 0.28 0.37 0.40 0.16 0.40 0.14 Siemens 1.00 0.34 0.16 0.14 0.31 –0.12 Nestlé 1.00 0.09 0.10 0.02 0.10 LVMH 1.00 0.33 0.51 –0.07 Toronto Dominion Bank 1.00 0.10 –0.10 Samsung 1.00 –0.09 BP 1.00 Standard deviation (%) 25.00 36.80 47.80 23.30 17.00 37.50 45.40
(Expected rate of return and risk) Syntex, Inc. is considering an investment in one of two common stocks. Given the information that follows, which investment is better, based on the risk (as measured by the standard deviation) and return? Common Stock A Probability 0.20 0.60 0.20 Probability 0.15 0.35 0.35 0.15 (Click on the icon in order to copy its contents into a spreadsheet.) Common Stock B Return 13% 14% 18% Return - 6% 7% 15% 21% a. Given the information in the table, the expected rate of return for stock A is 14.6 %. (Round to two decimal places.) The standard deviation of stock A is %. (Round to two decimal places.)
The index model has been estimated for stocks A and B with the following results: = 0.12 +0.670RM+еA RA= RB=0.04 +1.512RM + еB °M= 0.330 σ(eд) = 0.20 σ(eB) = 0.10 What is the covariance between each stock and the market index? (Round your answers to 4 decimal places.) Stock A covariance Stock B covariance
The table below shows standard deviations and correlation coefficients for seven stocks from different countries. Calculate the variance of a portfolio with equal investments in each stock. (Use decimals, not percents, in your calculations. Do not round intermediate calculations. Round your answer to 4 decimal places.) \table[[,BHP,,,,Toronto,,],[,Billiton,Siemens,Nestlé,LVMH,Dominion Bank,Samsung,BP],[BHP Billiton,1.00,0.32,0.42,0.36,0.22,0.36,0.19],[Siemens,,1.00,0.33,0.22,0.19,0.36,-0.09],[Nestlé,,,1.00,0.12,0.13,0.05,0.13],[LVMH,,,,1.00,0.30,0.48,-0.04],[Toronto Dominion Bank,,,,,1.00,0.07,-0.07],[Samsung,,,,,,1.00,-0.06],[BP,22.00,33.80,44.80,20.30,14.00,34.50,42.40],[Standard deviation (%),,,,,,,]] Portfolio variance
(Expected rate of return and risk) Syntex, Inc. is considering an investment in one of two common stocks. Given the information that follows, which investment is better, based on the risk (as measured by the standard deviation) and return? Common Stock A Probability 0.20 0.60 0.20 Probability 0.15 0.35 0.35 0.15 (Click on the icon in order to copy its contents into a spreadsheet.) ew an example Get more help. T 3 a. Given the information in the table, the expected rate of retum for stock A is 15.6 %. (Round to two decimal places.) The standard deviation of stock A is %. (Round to two decimal places.) E D 80 73 Return. 12% 16% 18% U с $ 4 R F 288 F4 V Common Stock B % 5 T FS G 6 Return -7% 7% 13% 21% B MacBook Air 2 F& Y H & 7 N 44 F? U J ** 8 M | MOSISO ( 9 K DD O . Clear all : ; y 4 FIX { option [ + = ? 1 Check answer . FV2 } ◄ 1 delete 1 return shift
(Expected rate of return and risk) Syntex, Inc. is considering an investment in one of two common stocks. Given the information that follows, which investment is better, based on the risk (as measured by the standard deviation) and return? Common Stock A Probability 0.25 0,50 0.25 Probability 0.10 0.40 0.40 0.10 (Click on the icon in order to copy its contents into a apreadsheet) Common Stock B Return 10% 17% 18% Return -4% 7% 13% 20% G a. Given the information in the table, the expected rate of return for stock A is 15.5% (Round to two decimal places) The standard deviation of stock A is (Round to two decimal places.)
The index model has been estimated for stocks A and B with the following results: RA= 0.12 +0.630RM+eA RB=0.04 +1.448RM+ eB OM= 0.290 o(eA) = 0.20 o(eg) = 0.10 What is the correlation coefficient between the two stocks? Note: Round your answer to 4 decimal places. Correlation coefficient 0.7951
Based on the following information: State of Economy Probability of State of Economy Return on Stock J Return on Stock K Bear .20 -.030.024 Normal .55.128.052 Bull .25 .208.082 a. Calculate the expected return for each of the stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation for each of the stocks. ( Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g , 32.16.) c. What is the covariance between the returns of the two stocks? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616.) d. What is the correlation between the returns of the two stocks? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., .1616.)

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