Calculate the correlation coefficient between two securities

Assignment Help Financial Management
Reference no: EM131072698

The Covariance between Stock A and Stock B is 0.02. The Standard deviation of Stock A is 12 % and that of Stock B is 25 %.

Calculate the correlation coefficient between the two securities.

Reference no: EM131072698

Questions Cloud

Why is the latter type of locks preferable : Why is the latter type of locks preferable?
Write a query that displays the order id and order date : Write a query that displays the order id and order date for any orders placed during the month of May, 2014. Do this using the BETWEEN clause. Format the date field as mm/dd/yy and use a heading of "Ordered".
Does it occur only under specific circumstances : Where does this issue occur? In other words, is it more common in urban areas, in some parts of the country, in some countries, etc.? When does this issue occur? Does it occur only under specific circumstances? If so, what are these?
The communication competency about united technologies : After reading the Communication Competency about United Technologies, identify the key behaviors demonstrated by senior leaders to reinforce the company's diversity programs.
Calculate the correlation coefficient between two securities : The Covariance between Stock A and Stock B is 0.02. The Standard deviation of Stock A is 12 % and that of Stock B is 25 %. Calculate the correlation coefficient between the two securities.
Identify and describe an ethical dilemma or issue : Identify and describe an ethical dilemma or issue created by some organizational change effort with which you are familiar. How was the ethical problem handled? What, if anything, would you do differently?
Changing an organization direction so difficult : Rosabeth Kanter, a leading authority on change, stated that trying to change an organization is like trying to teach elephants to dance. Why is changing an organization's direction so difficult?
Capital structure shift change the firm cost of equity : Lauterbach Corporation uses no debt, its beta is 1.0, and its tax rate is 40%. However, the CFO is considering moving to a capital structure with 30% debt and 70% equity. If the risk-free rate is 5.0% and the market risk premium is 6.0%, by how much ..
Continued to invest her accumulated amount : Meagan invests $1,200 each year in an IRA for 12 years in an account that earned 5% compounded annually. At the end of 12 years, she stopped making payments to the account, but continued to invest her accumulated amount at 5% compounded annually for ..

Reviews

Write a Review

Financial Management Questions & Answers

  For a repayment schedule

For a repayment schedule that starts at EOY three at $Z and proceeds for years 2 through 8 at $2Z, $3Z,..., what is the value of Z if the principal of this loan is $10,200 and the interest rate is 9% per year? Use a uniform gradient amount (G) in you..

  Concept of cost of capital mace manufacturing

Concept of cost of capital Mace Manufacturing is in the process of analyzing its investment decision-making procedures. Two projects evaluated by the firm recently involved building new facilities in different regions, North and South.

  Optimal order quantity in part change the ordering cost

Shakina Harris, who works in her brother’s hardware store, is in charge of purchasing. Shakina has determined that the annual demand for #6 screws is 150,000 and is fairly constant over the 200 days that the store is open each year. Shakina’s brother..

  What is present value of the annuity

A 14-ear annuity pay $2,800 per month, and payments are made at the end of each month. The interest rate is 12% compounded monthly for the first seven years, and 10% cmpounded monthly thereafter. What is the present value of the annuity?

  Yield to maturity-what must be coupon rate on bonds

Large Industries bonds sell for $1,071.08. The bond life is 9 years, and the yield to maturity is 5.0%. What must be the coupon rate on the bonds? Assume coupons are paid once a year and the face value is $1,000.

  Take today in order to hedge against GBP exchange rate risk

Suppose you receive 2,500,000 British Pounds (not Euros) today and plan to convert into US dollars early next February. Which is the correct action to take today in order to hedge against GBP exchange rate risk?

  What is the future value at a discount rate

Cannonier, Inc., has identified an investment project with the following cash flows. Year Cash Flow 1 $ 1,060 2 1,290 3 1,510 4 2,250 If the discount rate is 6 percent, what is the future value of these cash flows in Year 4? (Do not round intermediat..

  Requires an initial fixed asset investment

Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,190,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worth..

  Evaluate the role financial intermediaries play

Evaluate the role financial intermediaries' play in smoothing out the incompatibilities between savers and borrowers and promoting a well functioning financial system

  What is the stock price for each company

Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $3.05 next year. The growth rate in dividends for all three companies is 6 percent. The required return for each company’s stock is 9 percent, 12 percent, and 15 percent, respectiv..

  Prepaid expenses totaling-liabilities

At year’s end your company has cash of $10,500, receivables of $49,900, inventory of $40,200, and prepaid expenses totaling $5,900, Liabilities of $56,500 must be paid next year. A year ago receivables stood at $68,100, and sales for the current year..

  Used to estimate the cost of equity capital

If the CAPM is used to estimate the cost of equity capital, the expected excess market return is equal to

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd