Your eccentric Aunt Claudia has left you $50,000 in BP shares plus $50,000 cash. Unfortunately, her will requires that the BP stock not be sold for one year and the $50,000 cash must be entirely invested in one of the stocks shown below. BHP Agricultural Billiton BP Siemens Nestlé Sony Sanofi Bank BHP Billiton 1.00 0.34 0.05 0.37 0.55 0.47 0.44 BP 1.00 0.34 0.16 0.14 0.31 0.12 Siemens 1.00 0.09 0.10 0.02 0.10 Nestlé 1.00 0.33 0.51 0.06 Sony 1.00 0.20 0.30 Sanofi 1.00 0.31 Agricultural Bank 1.00 Standard deviation (%) 23.60 27.90 9.09 17.20 26.70 29.50 24.80 a. Calculate the portfolio variance for seven different portfolios. Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a decimal rounded to 5 places. b. What is the safest attainable portfolio under these restrictions?

Your eccentric Aunt Claudia has left you $50,000 in BP shares plus $50,000 cash. Unfortunately, her will requires that the BP stock not be sold for one year and the $50,000 cash must be entirely invested in one of the stocks shown below. BHP Agricultural Billiton BP Siemens Nestlé Sony Sanofi Bank BHP Billiton 1.00 0.34 0.05 0.37 0.55 0.47 0.44 BP 1.00 0.34 0.16 0.14 0.31 0.12 Siemens 1.00 0.09 0.10 0.02 0.10 Nestlé 1.00 0.33 0.51 0.06 Sony 1.00 0.20 0.30 Sanofi 1.00 0.31 Agricultural Bank 1.00 Standard deviation (%) 23.60 27.90 9.09 17.20 26.70 29.50 24.80 a. Calculate the portfolio variance for seven different portfolios. Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a decimal rounded to 5 places. b. What is the safest attainable portfolio under these restrictions?

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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