The correlation coefficient between the returns

Assignment Help Financial Management
Reference no: EM131572796

A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 24%, while stock B has a standard deviation of return of 18%. Stock A comprises 60% of the portfolio, while stock B comprises 40% of the portfolio. If the variance of return on the portfolio is .0380, the correlation coefficient between the returns on A and B is _________.

A. 0.23

B. 0.34

C. 0.77

D. 0.58

Please show all steps

Reference no: EM131572796

Questions Cloud

Weight of security in the minimum-variance portfolio : The weight of security B in the minimum-variance portfolio is
What is the sample standard deviation of the returns : Your stock investments return 8%, 12%, and -4% in consecutive years. The geometric return is 5.06%. What is the sample standard deviation of the returns?
What is the change in price bond will experience in dollars : You believe that in one year, the yield to maturity will be 8.4 percent. What is the change in price the bond will experience in dollars?
You have to invest today in order to reach your goal : If you can earn 8% on your funds, how much would you have to invest today in order to reach your goal?
The correlation coefficient between the returns : If the variance of return on the portfolio is .0380, the correlation coefficient between the returns on A and B is
Calculate the npv and irr without mitigation : Calculate the NPV and IRR with mitigation. Calculate the NPV and IRR without mitigation.
What is change in price bond will experience in dollars : What is the change in price the bond will experience in dollars?
Describe the problem that might lead you to purchase product : Problem Recognition Describe the problem that might lead you to purchase this product.
What is the amount of the firm stockholder equity : Purple Dalia, Inc. has the following balance sheet statement items. what is the amount of the firm's stockholder's equity?

Reviews

Write a Review

Financial Management Questions & Answers

  What is value of call option with strike price and maturity

What is the value of a call option with strike price 45 and maturity of 5 months?

  Oil powered generator with a solar power generator

Georgia Power is contemplating replacing an oil powered generator with a solar power generator. The old generator was purchased 22 years ago and is being depreciated over its 25 years life to a zero salvage value using straight-line depreciation. The..

  What is present value of the annuity

What is the present value of the following annuity? $1,021 every half year at the beginning of the period for the next six years, discounted back to the present at 8.93 percent per year, compounded semi annually?

  What is the nominal cost of six month discount loan

What is the nominal cost of six month discount loan of 100,000 with a stated rate of 8% if there are 100 in closing cost due at the beginning?

  Assets-liabilities and equity total revenue and net income

Use the Income Statement and Balance Sheet to determine the changes in: assets, liabilities, and equity total revenue and net income Briefly describe the change from the current and prior years in each of these key areas and determine if the changes ..

  Calculations are based on an effective annual interest rate

Both calculations are based on an effective annual interest rate of i. Calculate i.

  Which variable has higher forecasting risk

We are evaluating a project that costs $864,000, has an eight-year life, and has no salvagevalue. Assume that depreciation is straight-line to zero over the life of the project. Perform sensitivity analysis on variable costper unit and fixed costs. W..

  Explain which of the two options results in lower balance

Explain which of two options below results in lower balance after 6 months on investment of $6,000. Discuss why the two methods result in different results.

  Hand-to-mouth is currently? cash-constrained

Hand-to-Mouth is currently? cash-constrained, and must make a decision about whether to delay paying one of its? suppliers, or taking out a loan.

  Expected to affect any other future dividends

If the firm just announced that the next dividend will be an extraordinary dividend of $2.30 per share that is not expected to affect any other future dividends

  Some derivatives are traded on exchanges

Some derivatives are traded on exchanges; others are traded by financial institutions, fund managers, and corporations in the over-the-counter market, or added to new issues of debt and equity securities. Compare and contrast the different types of e..

  What is pretax cost of debt and aftertax cost of debt

Waller, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 9 years to maturity that is quoted at 100 percent of face value. The issue makes semiannual payments and has an embedded cost of 9 percent annually. Wha..

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