Consider equally weighted portfolio

Assignment Help Financial Management

Reference no: EM131932203

1. Consider an equally weighted portfolio that contains 20 stocks. If the average volatility of these stocks is 35% and the average correlation between the stocks is .4, then the volatility of this equally weighted portfolio is closest to:

A) .17

B) .41

C) .14

D) .23

2. Suppose you invest $20,000 by purchasing 200 shares of Abbott Labs (ABT) at $50 per share, 200 shares of Lowes (LOW) at $30 per share, and 100 shares of Ball Corporation (BLL) at $40 per share.

Suppose over the next year Ball has a return of 12.5%, Lowes has a return of 20%, and Abbott Labs has a return of -10%. The weight of Abbott Labs in your portfolio after one year is closest to:

A) -10.0%

B) 43.5%

C) 45.0%

D) 50.0%

Reference no: EM131932203

Questions Cloud

Expected return and standard deviation of portfolio : What is the expected return and standard deviation of this portfolio?

Evaluate theories to international relations and politics : Evaluate the major concepts and theories to international relations and politics. Analyze the local impact of global public administration policies and relation

Standard deviation of the resulting distribution : a. Find the mean and standard deviation of the resulting distribution of sample means for nequals =144

Identify three of the most environmentally negative impacts : Identify three of the most environmentally negative impacts of the Industrial Revolution and justify your choices.

Consider equally weighted portfolio : Consider an equally weighted portfolio that contains 20 stocks. then the volatility of this equally weighted portfolio is closest to:

The management-implemented employee welness programs : Write a research paper about the Management-Implemented employee welness programs.

How did surface area to volume ratio effect the diffusion : What can you conclude about the molecular make-up of egg whites based on the test you performed? Why might these foods contain these substances

How did the end of the first world war affect the us : How did the end of the First World War affect the US? How did the Second World War affect the US? How were these effects similar?

What is the significance of the quilt in the story : As part of your company's commitment to cultural awareness, each employee is urged to bring a piece of art, clothing, music, or something similar.

User Account

All Pages