User Account

All Pages

Determine the correlation coefficient

Assignment Help Finance Basics
Reference no: EM133002891

ABC and XYZ companies have the following expected risk and return data for next year: expected return (ABC) = 18%; expected return (XYZ) = 22%; standard deviation (ABC) = 22%; standard deviation (XYZ) = 30%; correlation between the stock returns of ABC and XYZ is 0.4. the risk of an equally weighted portfolio with these two stocks is 21.8632%. Determine the correlation coefficient that will be necessary to reduce the level of the equally weighted portfolio risk by 25%. (You must show all necessary workings, a single numerical value will not be accepted)

Reference no: EM133002891

Questions Cloud

Tourism industry and then draft a diversity policy : Review a sample Diversity Policy from within the travel and tourism industry and then draft a Diversity Policy
What is the amount of deferred tax liability : Explain, Does this give rise to a deferred tax asset or a deferred tax liability, and what is the amount of the deferred tax asset/liability?
Appraise role in the financial markets : Sovereign wealth funds (SWF) are an important participant in financial markets. Appraise their role in the financial markets.
What are the risks or costs to the company : Discuss which employee has responsibility for the related costs and the extent to which costs are controllable and by whom. What are the risks or costs
Determine the correlation coefficient : ABC and XYZ companies have the following expected risk and return data for next year: expected return (ABC) = 18%; expected return (XYZ) = 22%; standard deviati
Estimate the value of miley manufacturing inc : Given the following assumptions, estimate the value of Miley Manufacturing, Inc. using a Discounted Cash Flow (DCF) analysis to assist in the price negotiations
Review and Draft a Diversity Policy : Review and Draft a Diversity Policy - Demonstrated model behaviour and interacted with team members in positive, courteous, and professional way
What is the current share price-synovec co : Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 19 percent for the next 3 years, with the growth rate falling off to a constant 3 pe
What are the money-weighted ror and time-weighted ror : At the end of Year 2 she sold all her shares for $75/share. No dividends were paid for Year 2. What are the money-weighted ROR and time-weighted ROR?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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