User Account

All Pages

Calculate the expected portfolio return

Assignment Help Finance Basics
Reference no: EM131107221

Jamie Wong is considering building an investment portfolio containing two stocks, L and M. Stock L will represent 40% of the dollar value of the portfolio, and stock M will account for the other 60%. The expected returns over the next 6 years, 2013-2018, for each of these stocks are shown in the following table.


2214_h.jpg

a. Calculate the expected portfolio return, rp, for each of the 6 years.

b. Calculate the expected value of portfolio returns, r¯p, over the 6-year period.

c. Calculate the standard deviation of expected portfolio returns, σrp over the 6-year period.

d. How would you characterize the correlation of returns of the two stocks L and M?

e. Discuss any benefits of diversification achieved by Jamie through creation of theportfolio.

Reference no: EM131107221

Questions Cloud

What are the parameters of a holographic will : What are the parameters of a holographic will? How does a holographic will differ from a nuncupative will? What are the formal names of gifts of real property and personal property named in a will? Must a beneficiary accept a gift by will?
The value of the warrants at the time of issuance : The bonds were sold for $3,000,000. The value of the warrants at the time of issuance was $100,000. Prepare the journal entry to record this transaction.
How cognitive processes affect classical and operant conditi : Discuss the difference between hindsight bias and confirmation bias, and provide an example of each.
How research on my topic fits into the broader framework : The literature review process is important in narrowing the focus of a dissertation topic. A major focus in the literature review process in the early stages of the dissertation is to identify a gap in literature. The gap identifies research that ..
Calculate the expected portfolio return : Calculate the expected portfolio return, rp, for each of the 6 years. Calculate the expected value of portfolio returns, r¯p, over the 6-year period. Calculate the standard deviation of expected portfolio returns, σrp over the 6-year period.
What did you learn from the marshall interview : Mike Wallace's interview with Thurgood Marshall provides rich insights into the politics of rights and equality in the mid-Twentieth Century. What portion of the interview did you find most informative? Why? What did you learn from the Marshall i..
How many bitstrings of length : How many bitstrings of length 8 are there that contain 4 (or more) consecutive 0’s or contain 4 (or more) consecutive 1’s?Justify your answer.
Why is identity verification so important : Lets say you have an Intel PC running Microsoft Windows 7 and attached to the PC via a PCI connection is a credit card swipe terminal.
Discuss the propriety of this accounting treatment : Four years after issue, debentures with a face value of $1,000,000 and book value of $960,000 are tendered for conversion into 80,000 shares of common stock immediately after an interest payment date.

Reviews

Write a Review

Finance Basics Questions & Answers

  An anonymous buyer has offered through a business broker to

the board of directors for colton industries a diversified manufacturer of fiberglass products is considering a

  Estimate the propertys rate of return if investors demand a

construction period nov 2012 to aug 2013total square feet 15781 site 2 acres.number of buildings onebuilding size

  What is the pv of the cash flows

You own a natural gas pipeline that will generate a $2 million cash return over the coming year. What is the PV of the cash flows if the pipeline is scrapped after 20 years

  Mtthew has been secretly depositing 2500 in his savings

matthew has been secretly depositing 2500 in his savings accountevery december starting in 1999. his account earns 5

  Calculate the amount of money the couple

Calculate the amount of money the couple will need the first year Jazz starts college. Calculate the capital needs of the couple at retirement and the current value of their retirement needs.

  Calculate the expected return on the mutual fund

A risk-free asset yielding 3.00 percent per year and a mutual fund consisting of 65% stocks and 35 percent bonds. The expected return on stocks is 12.00% per year and the expected return on bonds is 5.50 percent per year.

  Long-term or short-term performance

From the e-Activity, determine whether stock prices are affected more by long-term or short-term performance. Provide one (1) example of the effect that supports your claim.

  The strengths and weaknesses of envisioned design and method

the strengths and weaknesses of your envisioned design and methods

  The company wishes to continue this dividend growth

the erie heating company has been very successful in the past four years. over these years it paid common stock

  Current all-equity capital structure

a. Calculate earnings per share under the current all-equity capital structure and under the alternative financing plan. b. At what EBIT will American be indifferent between the two capital structure alternatives?

  How much will you have at the end of the 24 years

If the investment plan pays you 10 percent per year for the first 12 years and 6 percent per year for the next 12 years, how much will you have at the end of the 24 years?

  The project has the same risk as necs existing businesses

national electric company nec is considering a 49 million project in its power systems division. tom edison 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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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