You wish to combine two stocks, Encor and Maestro, into a portfolio with an expected returnof 16.9 percent. The expected return of Encor is 2.9 percent with a standard deviation of 1percent. The expected return of Maestro is 26.8 percent with a standard deviation of 10.9percent. The correlation between the two stocks is 0.4.What is the composition (weights) of the portfolio? (Round answer to 4 decimal places, e.g.14.5125%.)Weight in Encor%Weight in Maestro%What is the portfolio standard deviation? (Round intermediate calculations to 7 decimalplaces, e.g. 0.5125129 and the final answer to 4 decimal places, e.g. 14.5125%.)Standard deviation%

In the question, Portfolio return is given and asked to calculate weights. In this case, we will…

Answered: What is the composition (weights) of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Consider the following two assets: Asset Expected return Standard deviation of returns 1 18% 30% 2 8% 10% The returns on the two assets are perfectly negatively correlated (i.e. coefficient of -1). Calculate the proportions of assets 1 and 2 that generate a portfolio with a standard deviation of zero. What is the expected return of that portfolio?
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The expected return for asset A is 4.00% with a standard deviation of 9.00%, and the expected return for asset B is 6.75% with a standard deviation of 3.00%. Based on your knowledge of efficient portfolios, fill in the blanks in the following table with the appropriate answers. Proportion of Portfolio in Security A WA 1.00 0.75 0.50 0.25 0.00 Proportion of Portfolio in Security B WB 0.00 0.25 0.50 0.75 1.00 Expected Portfolio Return FP 4.00% 4.69% 6.06% 6.75% Standard Deviation Op Case I (PAB= -0.4) 6.5 4.1 2.5 3.0 Standard Deviation op Case II (PAB= 0.3) 9.0 5.2 3.6 3.0 The minimum risk portfolio allocation to asset A within the portfolio for case III is. Therefore, you are better off Standard Deviation op Case III (PAB=0.8) 9.0 7.4 5.8 ▼ 3.0
please this part of the question ASAP too What is the standard deviation of the rate of return on your client's portfolio? (Round your intermediate calculations and final answer to 1 decimal place.)
What is the standard deviation of the portfolio that invests equally in all three assets M, N, and O?
Consider the following two assets: Asset Expected return Standard deviation of returns 1 18% 30% 2 8% 10% The returns on the two assets are perfectly negatively correlated (i.e. coefficient of -1). Calculate the proportions of assets 1 and 2 that generate a portfolio with a standard deviation of zero. What is the expected return of that portfolio Calculate the expected returns and standard deviations of three other portfolios with weightingsof your choice. Present a graph of your results.
The standard deviation of a portfolio is simply the weighted average of the standard deviations for the individual assets within the portfolio. Group of answer choices True False
Sangita
A portfolio management organization analyzes 72 stocks and constructs a mean-variance efficient portfolio that is constrained to these 72 stocks. How many estimates of expected returns, variances and covariances are needed to optimize this portfolio? (Using Markowitz Model)

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