Calculate the expected return and variance of your portfolio

Assignment Help Financial Management

Reference no: EM13847466

You have three assets X, Y and Z with expected returns of 10%, 15% and 20%, respectively. The weights of the first two assets are 50% and 70% respectively. The standard deviations of the returns for assets X and Y are 3% and 5%. The covariance of assets X with asset Y is 20%, the covariance of asset Z with asset X is -30%, the covariance of asset Z with Y is 10%, and the covariance of asset Z with Z is 36%.

Calculate the expected return and the variance of your portfolio.

Reference no: EM13847466

Questions Cloud

What is the ex ante real interest rate : Suppose that in 2014 Julie lends Bill $1,000 to be repaid in 2015 at a nominal interest rate of 5%. Additionally, suppose Julie and Bill both expect prices to rise by 2% between 2014 and 2015. What is the ex ante real interest rate? How much money do..

Analysis of future value-types of boreholes for drilling : In some manufacturing operation three types of boreholes for drilling may be used. The cheapest is a stainless high speed steel (HSS), but has a shorter one of gold or another oxide of titanium nitride life. what kind of hole should be used, accordin..

Calculate the value of share of stock : Using the P/E ratio approach to valuation, calculate the value of a share of stock.

Investment proposal-weighted average cost of capital : Your firm is considering a new investment proposal and would like to calculate the weighted average cost of capital. If the firm's bonds are not frequently traded, how would you go about determining a cost of debt for this company? A preferred stock ..

Calculate the expected return and variance of your portfolio : You have three assets X, Y and Z with expected returns of 10%, 15% and 20%, respectively. The weights of the first two assets are 50% and 70% respectively. Calculate the expected return and the variance of your portfolio

Assume the face value of the treasury bill : Suppose investors can earn a return of 2% per 6 months on a Treasury note with 6 months remaining until maturity. What price would you expect a 6-month maturity Treasury bill to sell for?

Assets as percentage of total assets in balance sheet : Which institution, University of Texas and a local bank, do you expect to have more tangible assets as a percentage of total assets in its balance sheet? And why?

What would be the full economic price of this legislation : From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that banks impose on noncustomers, who make $14 million in withdrawals from other banks’ ATM machines. What would be the f..

Accusoft systems offers business owners software package : The company "Accusoft Systems" offers business owners a software package that maintains the records of many accounting functions from sales bills through bank transactions. The site license costs $ 22,000 per installation concept and involves a fee o..

User Account

All Pages