Describe the characteristics of portfolio

Assignment Help Finance Basics
Reference no: EM1357326

Your portfolio consists of $50,000 invested in Stock X and $50,000 invested in Stock Y. Both stocks have an expected return of 15%, a beta of 1.6, and a standard deviation of 30%. The returns of the two stocks are independent, so the correlation coefficient between them, rxy, is zero. Which of the following statements best describes the characteristics of your portfolio?

A. Your portfolio has a beta equal to 1.6 and its expected return is 15%.
B. Your portfolio has a standard deviation of 30% and its expected return is 15%.
C. Your portfolio has a standard deviation less than 30% and its beta is greater than 1.6.
D. Your portfolio has a standard deviation greater than 30% and a beta equal to 1.6.
E. Your portfolio has a beta greater than 1.6 and an expected return greater than 15%.

 

Reference no: EM1357326

Questions Cloud

Just in time : Surge capacity is the ability to take on an extra number of customers or product requests.
Journal entries of bad debt amounts : On December 31, of the current year, a company's unadjusted trial balance revealed the following: Accounts receivable of $185,600; Sales Revenue of $1,280,000; (75% were on credit), and Allowance for Doubtful Accounts of $1,600 (credit balance). P..
Write java application to input three integers from user : Write Java application that inputs three integers from user and displays sum, average, product, smallest, and largest of the numbers.
Explain this policy be consistent with profit maximization : Management charges higher highly rates in the winter, when its average occupancy rate is 85 percent. Explain can this policy be consistent with profit maximization.
Describe the characteristics of portfolio : Your portfolio consists of $50,000 invested in Stock X and $50,000 invested in Stock Y. Both stocks have an expected return of 15 percent, a beta of 1.6, and a standard deviation of 30 percent.
Explain what is the hardest challenge or barrier : Barrier or Challenge to Change - Explain what is the hardest challenge or barrier to overcome when implementing a change in strategy?
Government and nonprofit accounting : Some, but not all, contributions of goods and services are given accounting recognition. In each of the following scenarios, an organization receives a contribution in kind. Prepare journal entries, as necessary, to give them accounting recognitio..
Implement controls for global operations : Control systems for global operations fall under direct coordinating mechanisms and indirect coordinating mechanisms. How are these controls implemented?
Illustrate what effect will this have on its optimal price : The company's settlement obligations are expected to raise its average total cost per pack by about $60. Illustrate what effect will this have on its optimal price.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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