Viation of return of 25 percent. Stock Y has a standard deviation of return of 5 percent. The correlation coefficient between th two stocks is 0.5. If you invest 60 percent of your funds in Stock X and 40 percent in Stock Y, what is the standard deviation of your portfolio? Multiple Choice 14.2 percent 24.9 percent 16.1 percent
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- Common Stock C has a standard deviation of return of 10 percent. Common Stock D has a standard deviation of return of 20 percent. The correlation coefficient between the two stocks is 0.5. If you invest 60 percent of your funds in stock C and 40 percent in Common stock D, what is the standard deviation of your portfolio? O 21.0 percent O 14.8 percent 10.3 percent O 12.2 percentc) Stock 1 has a standard deviation of return of 1%. Stock 2 has a standard deviation of return of 8%. The correlation coefficient between the two stocks is 0.5. If you invest 60% of your funds in stock 1 and 40% in stock 2, what is the standard deviation of your portfolio? Please provide the details of your calculations and discuss your results.c) Stock 1 has a standard deviation of return of 1%. Stock 2 has a standard deviation of return of 8%. The correlation coefficient between the two stocks is 0.5. If you invest 60% of your funds in stock 1 and 40% in stock 2, what is the standard deviation of your portfolio? Please provide the details of your calculations and discuss your results. You decide now to combine your portfolio (discussed in question c) with another portfolio with the same standard deviation and invest equally in both portfolios. The correlation between the two portfolios is zero. d) What is the standard deviation of this new portfolio? Please provide the details of your calculations and discuss your results.
- c) Stock 1 has a standard deviation of return of 1%. Stock 2 has a standard deviation of return of 8%. The correlation coefficient between the two stocks is 0.5. If you invest 60% of your funds in stock 1 and 40% in stock 2, what is the standard deviation of your portfolio? Please provide the details of your calculations and discuss your results. You decide now to combine your portfolio (discussed in question c) with another portfolio with the same standard deviation and invest equally in both portfolios. The correlation between the two portfolios is zero. d) What is the standard deviation of this new portfolio? Please provide the details of your calculations and discuss your results. e) Did we achieve diversification by combining uncorrelated portfolios with identical levels of risk? Explain.Stock 1 has a standard deviation of return of 6%. Stock 2 has a standard deviation of return of 2%. The correlation coefficient between the two stocks is 0.5. If you invest 60% of your funds in stock 1 and 40% in stock 2, what is the standard deviation of your portfolio? Please provide the details of your calculations and discuss your results.1) Stock 1 has a standard deviation of return of 7%. Stock 2 has a standard deviation of return of 1%. The correlation coefficient between the two stocks is 0.5. If you invest 60% of your funds in stock 1 and 40% in stock 2, what is the standard deviation of your portfolio? You decide now to combine your portfoliowith another portfolio with the same standard deviation and invest equally in both portfolios. The correlation between the two portfolios is zero. 2) What is the standard deviation of this new portfolio? 3) Is diversification achieved from combining the uncorrelated portfolios with idential risk.
- Stock X has a standard deviation of return of 10%. Stock Y has a standard deviation of 20%. The correlation coefficient between the stocks is 0.5. If you invest 60% of your funds in stock X and 40% in stock Y. What is the standard deviation of your portfolio? (please state the formula and show your workings)You decide to invest in a portfolio consisting of 15 percent Stock X, 51 percent Stock Y, and the remainder in Stock Z. Based on the following information, what is the standard deviation of your portfolio? State of Economy Probability of State Return if State Occurs of Economy Stock X Stock Y Stock Z Normal .77 10.50% 3.90% 12.90% Boom .23 17.80% 25.80% 17.30% Multiple Choice 5.79% 2.51% 3.35% 8.44% 7.24%Consider the following probability distribution for stocks C and D: State Probability Return on Stock C Return on Stock D 1 0.30 7 % − 9 % 2 0.50 11 % 14 % 3 0.20 − 16 % 26 % If you invest 25% of your money in C and 75% in D, what would be your portfolio's expected rate of return and standard deviation?
- You own a portfolio that is 22 percent invested in Stock X, 37 percent in Stock Y, and 41 percent in Stock Z. The expected returns on these three stocks are 12 percent, 15 percent, and 17 percent, respectively. What is the expected return on the portfolio? Expected return _________%You have a portfolio that is invested 22 percent in Stock A, 32 percent in Stock B, and 46 percent in Stock C. The betas of the stocks are .67, 1.22, and 1.51, respectively. What is the beta of the portfolio? Multiple Choice 1.18 1.23 1.39 1.13 1.01Consider an investment portfolio that consists of three different stocks, with the amount invested in each asset shownbelow. Assume the risk-free rate is 2.5% and the market risk premium is 6%. Use this information to answer thefollowing questions.Stock Weights BetasChesapeake Energy 25% 0.8Sodastream 50% 1.3Pentair 25% 1.0a) Compute the expected return for each stock using the CAPM and assuming that the stocks are all fairly priced.b) Compute the portfolio beta and the expected return on the portfolio.c) Now assume that the portfolio only includes 50% invested in Pentair and 50% invested in Sodastream (i.e., a twoassetportfolio). The yearly-return standard deviation of Pentair is 48% and the yearly-return standard deviation ofSodastream is 60%. The correlation coefficent between Pentair’s returns and Sodastream’s returns is 0.3 What is theexpected yearly-return standard deviation for this portfolio?