Using the data in the following table, and the fact that the correlation of A and B is 0.56, calculate the volatility (standard deviation) of a portfolio that is 60% invested in stock A and 40% invested in stock B Realized Returns Year Stock A 2008 -6% 2009 12% 2010 7% 2011 -2% 2012 2% 2013 5% Stock B Question content area bottom 12% 35% 10% -2% -12% 33% Part 1 The standard deviation of the portfolio is %.

Using the data in the following table, and the fact that the correlation of A and B is 0.56, calculate the volatility (standard deviation) of a portfolio that is 60% invested in stock A and 40% invested in stock B Realized Returns Year Stock A 2008 -6% 2009 12% 2010 7% 2011 -2% 2012 2% 2013 5% Stock B Question content area bottom 12% 35% 10% -2% -12% 33% Part 1 The standard deviation of the portfolio is %.

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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From the following informatongiven below , calculate and differentiate between a. Arithmetic Mean, b. Geometric Mean and c. Standard Deviation Partiulard stock A stock B Year 1 13% 19% Year 2 15% 23% Year 3 12% 20% Year 4 11% 18%
N1
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Colonel Motors (C) Separated Edison (S) Expected Return 10% 8% Standard Deviation 6% 3% Please represent graphically all potential combinations of stocks C and S, if the correlation coefficient between the returns of stocks C and S is: A) 1 B) 0 C) -1 Please report these investment opportunity sets in the corresponding Excel sheets.
Use the following information to calculate the expected return and standard deviation of a portfolio that is 60 percent invested in 3 Doors, Incorporated, and 40 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 Expected return Standard deviation 3 Doors, Incorporated 16% 46 0.31 2.00% 2.00% Down Company 24% 48
Accounting Use the following information: Stock A B Good state 12% 17% Bad state 0% -1% Assume there is 60% probability that the good state occurs and 40% chance the bad state occurs. What is the expected return of a portfolio that is 9% invested in stock A and 1-9% invested in B? (Please use 5 decimal places, this should be written in percentage return, so an answer of 23.143% should be written at .23143)
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