What is the standard deviation of two-asset portfolio

Assignment Help Financial Management
Reference no: EM131059132

What is the standard deviation of a two-asset portfolio comprised of Stock A and Stock B if both Stock A and Stock B have a variance of 0.2209, the correlation coefficient between the two stocks is -0.17, and Stock A makes up 24% of the portfolio?

Reference no: EM131059132

Questions Cloud

Contractual savings organizations provide all of services : Contractual savings organizations provide all of the follwoing services with the exception of -------?
Service staff with an electronic ordering process : A restaurant is contemplating replacing its service staff with an electronic ordering process. Installing computers at each table will cost $150,000, but is expected to generate a cost savings of $40,000 per year for the next 10 years, when the compu..
Standards and practice of holding individuals accountable : Pat James, the purchasing agent for a local plant of the Oakden Electronics Division, was con- sidering the possible purchase of a component from a new supplier. The component’s purchase price, $0.90, compared favorably with the standard price of $1...
What is the standard deviation of two-asset portfolio : What is the standard deviation of a two-asset portfolio comprised of Stock A and Stock B if both Stock A and Stock B have a variance of 0.2209, the correlation coefficient between the two stocks is -0.17, and Stock A makes up 24% of the portfolio?
Four-year project to improve production efficiency : Warmack Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $480,000 is estimated to result in $195,000 in annual pretax cost savings.
What will be the annual rate of return on the bond : A 2-year maturity bond with face value of $1,000 makes annual coupon payments of $112 and is selling at face value. What will be the annual rate of return on the bond if its yield to maturity at the end of the year is 6%? 11.2%? 13.2%?
What is the NAV of the fund and Expected NAV : A mutual fund has 400 shares of General Electric, currently trading at $14, and 400 shares of Microsoft, Inc., currently trading at $29. The fund has 1,000 shares outstanding. What is the NAV of the fund? If investors expect the price of General Elec..
Expected portfolio returns : Expected Portfolio Returns. If a portfolio has a positive investment in every asset, can the expected return on the portfolio be greater than that on every asset in the portfolio? Can it be less than that on every asset in the portfolio?

Reviews

Write a Review

Financial Management Questions & Answers

  Put with the same strike and expiration date sells

A call option currently sells for $8.25. It has a strike price of $50 and three months to maturity. A put with the same strike and expiration date sells for $6.25. If the risk-free interest rate is 6 percent, what is the current stock price?

  Standard cost per batch and projected profit per batch

Billy Products operates a small plant in New Mexico that produces dog food in batches. The product sells for $3 per pound. Standard costs (Per batch) for 2015 are: At the start of 2015, the company estimated monthly production and sales of 40 batches..

  Estimate of remaining cash flows will be revised

ACME has hired you to study the feasibility of a new toy that requires a $5 million initial investment. ACME expects annual cash flows of $880,000 for the next 10 years. The discount rate is 10%. a. What is the NPV of the new toy? b. After one year, ..

  Assume that the risk-free rate has not changed

On Oct 10, 2015, gold on the spot market is at $1,000 an ounce. A forward gold contract for delivery of gold on Oct 10, 2016 is priced at $1,030. Three months pass and spot gold is still at $1,000. What should be the approximate price of the Oct 10, ..

  Software games company avalanche entertainment

Software games company Avalanche Entertainment is considering expanding its highly successful online game franchise to either the board game or trading card environment. The company has decided that it will invest in one project but not both. The ..

  What is the actual effective annual rate

If you have a credit card with a stated interest rate of 16% Annual Percentage Rate (APR), what is the actual Effective Annual Rate (EAR) if they use daily compounding (assuming 365 days/year)? What is the limit if they use continuous compounding?

  Process for preparing pro forma income statements

Describe the process for preparing pro forma income statements and balance sheets. How are these statement analyzed to make cogent evaluations?

  Rate of return on an investment with the cash flows

What is the internal rate of return on an investment with the following cash flows? Year Cash Flow

  Compute the effective interest rate for this loan

You are planning to purchase a new house or condominium to use as your primary residence. This assignment will analyze some of the financial aspects of doing so. Compute the effective interest rate for this loan. Compute the monthly payment amount of..

  What is the effective annual interest rate on this loan

Your company has just taken out a loan for $75,000. The stated interest rate on this loan is 10 percent, but the loan is an add-on loan which will be repaid in 12 equal monthly installments, beginning at the end of the first month. How large are your..

  What is the operating cash flow for project

How would you solve for this? What is the operating cash flow for the following project? Sales are $200,000, operating costs are $50,000, depreciation is $20,000 and the tax rate is 30%.

  For the purpose of switchover to straight line

A new desktop CNC Training Lathe has a list price of $19,800 and a 15-year estimated life. It is going to be placed in the Manufacturing Laboratory on January 1, 2017. The permissible salvage value of the lathe is zero at the end of 15 years. For the..

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