Portfolio of stocks with weights

Assignment Help Business Management
Reference no: EM131105488

Suppose you have the following information about three stocks:• Stock 1: α = 0.9%, β = 1.2, σ(e) = 12%• Stock 2: α = 1.2%, β = 0.6, σ(e) = 8%• Stock 3: α = -0.6%, β = 1.1, σ(e) = 16%

(a) Calculate α, β and σ(e) of a portfolio of these stocks with weights {35%, 25%, 40%}.Show your results accurate to 4 decimal places.

(b) Calculate the reward to volatility ratio (slope of the capital allocation line) for theportfolio in (a) if the risk-free rate of return is 1%, the expected excess return on the market indexis 7% and the standard deviation of market index returns is 10%. Show your results accurate to4 decimal places

Reference no: EM131105488

Questions Cloud

Evaluate the adequacy of consideration : American engineering inc, defends aganist a breach of contract suit by beta corporation by claiming that the consideration for their contract was inadequate. A court will not normally evaluate the adequacy of consideration?
What is hurdle rate : What is hurdle rate? What would make it remain constant? How is this calculated?
What amount should shin report : No estimated tax payments were made during year 2. At December 31, year 2, Shin determined that it was more likely than not that 10% of the deferred tax asset would not be realized. In its year 2 income statement, what amount should Shin report as..
Question regarding the artons of machine screws : Romo Enterprises needs someone to supply it with 124,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to bid on the contract.
Portfolio of stocks with weights : Calculate α, β and σ(e) of a portfolio of these stocks with weights {35%, 25%, 40%}.Show your results accurate to 4 decimal places.
Determine the input impedance seen at each port : Determine the input impedance seen at each port, and find the incident and reflected voltages at each port
Questions about adult obesity and diabetes : Please carefully consider grading rubric and instructions. I just need the table portion filled out. Use data provided in USDA_Unit8.cvs to create 2 research questions about adult obesity and diabetes.
How the moneys being psent the loan is : Don, a minor, takes out a loan from a bank to get her own apartment and includes that fact in the loan application. THe bank makes the loan with the understand that its to be used for rent payments but doesnt moniotr how the moneys being psent (a..
Calculate the power lost and the stored electric : Calculate the power lost and the stored electric and magnetic energies, and show that the input impedance can be expressed as in (4.17).

Reviews

Write a Review

Business Management Questions & Answers

  Explain what is corporate-level strategy?

Explain What is corporate-level strategy? Why is it important? and Explain the levels of diversification firms can pursue by using different corporate-level strategies and List and explain three reasons causing firms choose to diversify their operati..

  Identify the types of market systems

Provide a company overview, and identify the countries in which the corporation operates and identify the types of market systems and types of legal systems that exist in the countries where the corporation operates. What effect do these have on th..

  Illustrate what is the service factor for this system

Illustrate what is the service factor for this system? b) Illustrate what is the average number of these machines in service? c) Illustrate what impact on machines in service would there be if a second technician were available?"

  High-end boating market budgeting processes and techniquesa

high-end boating market budgeting processes and techniquesa company builds custom yachts for the high-end boating

  Staffing arguments for or against the use personality

staffing arguments for or against the use personality assessments in hr selectionmany hr personnel believe that

  Overview of conflict resolution and initiatives

Overview of conflict resolution and initiatives - Teaching conflict resolution skills in a workshop

  Create a systemic approach for any incs compliance

Create a systemic approach (e.g., steps, flow chart, or directions) for ABC Inc.'s compliance with the following federal statutes.

  Ethical theories to business situations

Apply ethical reasoning skills and ethical theories to business situations.

  Humanities what music do you associate with childhoodmusic

humanities what music do you associate with childhood?music connects us to time and place. for instance many of us may

  Would each target audience get different messages

Explain what your imaginary crisis is in some detail. As your company's chief public relations person, once you are aware of the crisis, whom would you notify within the organization about it and how would you notify

  Relationship among leadership and organizational behavior

Explain why is defining culture simply as the organization's values not an effective way to look at culture and describe the characteristics of effective teams.

  Description of communicationin words why are effective

description of communicationin words why are effective communication skills a must skill for successful leadership? how

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