Calculate the portfolio weight, Financial Management

Assume Intel's stock has an expected return of 26% and a volatility of 50%, while Coca-Cola's has an expected return of 6% and volatility of 25%. If these two stocks were perfectly negatively correlated (i.e., their correlation coefficient is -1),

a.    Calculate the portfolio weights that remove all risk.

b.    If there are no arbitrage opportunities, what is the risk-free rate of interest in this economy?

Posted Date: 3/14/2013 2:02:36 AM | Location : United States

Related Discussions:- Calculate the portfolio weight, Assignment Help, Ask Question on Calculate the portfolio weight, Get Answer, Expert's Help, Calculate the portfolio weight Discussions

Write discussion on Calculate the portfolio weight
Your posts are moderated
Related Questions
Calculate annual payments into a savings account: Mr. Jones intends to retire in 20 years at the age of 65. As, yet he has not provided for retirement income, and he wants to

Q. Nature of the business? The working capital requirement of the firm basic depends upon the nature of the business. public utility undertaking like the water supply and rai

use the operating cycle to formulate a broiler business

Loans from the financial institutions: Financial institutions such as the commercial bank life insurance corporation, industries financial development corporation bank of the

Exit strategy Venture capitalists and other financiers will negotiate an exit strategy at the point of advancing the money. The exit strategy will involve them realising their

Portfolio Diversification The objectives of diversification are to: Reduce the variability of the fund's total return; Reduce the exposure to any single component of t

Q. Explain about Centralised treasury function? Treasury departments are usually a feature of larger companies than Frantic although it is perhaps beneficial to consider the be

Q. Define the finance function? Is it a risk-return trade off? What is the basic role of a modern financial manager? What is the basic importance of finance function in the mana

Financial Leverage In accounting and finance, the amount of long lasting debt that an organization has in relation to its equity the longer the ratio, the larger the lever

What are the benefits of the JIT inventory control system? The just-in-time (JIT) inventory control system lesser inventory carrying costs and tends to increase quality.