### What is the expected return of the stock a and b portfolio

Assignment Help Finance Basics
##### Reference no: EM13299420

Stocks A and B have a correlation coefficient of 0.8. The stocks expected returns and standard deviations are in the table below. A portfolio consisting of 40% of stock A and 60% of stock B is created.

Stock Expected Return Standard Deviation
A 20% 25%
B 15% 19%

i. What is the expected return of the stock A and B portfolio?
ii. What is the standard deviation of the stock A and B portfolio?
iii. What percentage of stock A should be invested to obtain the minimum risk portfolio that contains stock A and B?

### Previous Q& A

#### Define what is the final temperature inside the calorimeter

One piece of copper jewelry at 108 degrees Celsius has exactly twice the mass of another piece, which is at 44 degrees Celsius. Both pieces are placed inside a calorimeter whose heat capacity is negligible. What is the final temperature inside the..

#### Explain a calorimeter whose heat capacity is negligibe

One piece of copper jewelry at 108 degrees Celsius has exactly twice the mass of another piece, which is at 44 degrees Celsius. Both pieces are placed inside a calorimeter whose heat capacity is negligible.

#### Would you describe such an acquisition market as efficient

Suppose that stock prices of target firms in acquisitions responded to acquisition announcements over a three day period rather than almost instantly.

#### Explain solution of the weak base ammonia nh3

What is the pH of a 0.15 M solution of the weak base ammonia (NH3). The Ka of the conjugate acid is (NH4) is 5.6e-10.

#### Unit product cost for the month under absorption costing

What is the unit product cost for the month under variable costing and what is the unit product cost for the month under absorption costing?

#### What is shamus mass on the moon

Shamu weighs 10000 lbs. on earth. What is Shamu's mass (in kg) on Earth, What is shamu's mass (in kg) on the moon

#### What is your expected starting salary

Without considering the additional educational years or the time value of money, what is your expected starting salary as well as the standard deviation of that starting salary?

#### Explain a gaseous reaction occurs at a constant pressure

A gaseous reaction occurs at a constant pressure of 50.0 atm and releases 67.9kJ of heat. Before the reaction, the volume of the system was 8.80L . After the reaction, the volume of the system was 2.80L .Calculate the total internal energy change ..

#### What is your aproxx real rate of return on this investment

You purchased a stock for 47.10, over course of a yr you got \$2.40 per share in dividends and inflation avged 3.4 percent. Today you sold your shares for 49.50 a share. What is your aproxx real rate of return on this investment?

#### How to calculate the fraction of hexane molecules

Consider a 20 mol % mixture of hexane (P°=72kPa) in toluene (P°=35kPa). Calculate the fraction of hexane molecules that reside in the vapor above the solution.

### Similar Q& A

#### Internal and external pay equity

Explain the importance of managing pay equity (both internal and external) and the consequences for not doing so.

#### Calculate the price of stock

The Jackson-Timberlake wardrobe Corporation just paid a dividend of \$1.95 per share on its stock. The dividends are expected to increase on a constant rate of 6% per year indefinitely.

#### Analyzing the use of databases in a large bank

I need help analyzing the use of databases in a large bank or collection call center. I need examples and descriptions of known database applications that are used

#### What are some considerations for companies in choosing

Offer three reasons with full explanation for why it is important for companies to keep a fair portion of their overall asset balance in liquid assets.

#### How are treasury bonds bought

What are some of the factors you should consider when buying a bond?

#### What will be your rate of return on the investment

An investment offers to pay you \$10,000 a year for five years. If it costs \$33,520, what will be your rate of return on the investment?

#### Determine the equivalent discount rate

Your bank is offering you an account that will pay 18% interest in total for a two year deposit. Determine the equivalent discount rate for the following.

#### Capital budgeting decision or security investment

Describe a real world decision which you've analyzed (like a capital budgeting decision or security investment). Discuss how you may now go about setting up "investment decision."

#### What is burleighs wacc

The firm has a pre-tax cost of debt of 8.1 percent. The risk-free rate is 4.3 percent and the market rate of return is 13.6 percent. What is Burleigh's WACC?

#### At what price should the annual payment bond sell

Neither bond is callable. At what price should the annual payment bond sell?

#### Who is right and why

AAAU tells Ford that they must fire the "scabs" who were hired during the strike so their union members can have their jobs back. Ford says that they aren't going to fire anyone and they don't have to. Who is right and why?

#### Why firms in these industries would prefer

Firms in the real estate investment trusts (REITs), airlines, electric utilities, and paper products industries tend to have high leverage. Explain why firms in these industries would prefer to have high leverage.