What is standard deviation of portfolio

Assignment Help Financial Management
Reference no: EM131910255

Security F has an expected return of 10 percent and a standard deviation of 26 percent per year. Security G has an expected return of 17 percent and a standard deviation of 58 percent per year. We form a portfolio composed of 30 percent of security F and 70 percent of security G. If the correlation between the returns of security F and security G is .25, what is the standard deviation of the portfolio?

Reference no: EM131910255

Questions Cloud

What are the upper and lower bounds for these projections : What are the upper and lower bounds for these projections? What is the base-case NPV? What are the best- and worst-case scenario NPVs?
What is the intrinsic value of vandell equity to hastings : What is Vandell’s pre-acquisition levered cost of equity? What is its unlevered cost of equity? What is the intrinsic value of Vandell’s equity to Hastings?
Cost of equity and weighted average cost of capital : What are Vandell’s cost of equity and weighted average cost of capital? What is Vandell's intrinsic value of operations?
Compute the rate of return of project : Agdist Corporation distributes agricultural equipment. Compute the rate of return of this project.
What is standard deviation of portfolio : Security F has an expected return of 10 percent and a standard deviation of 26 percent per year. what is the standard deviation of the portfolio?
Calculate payback period for modernize-replace alternatives : Expert Chips is a manufacturer of prototype chips based in? Dublin, Ireland. Calculate payback period for the modernize and replace alternatives.
Cost basis is equal : A commercial property is purchased for $800,000 which includes $75,000 for land and $725,000 for building. For depreciation purposes, cost basis is equal to.
Annual interest rate on lending arrangement : What is the effective annual interest rate on this lending arrangement?
Bond is the interest rate you earn on investment : The YTM on a bond is the interest rate you earn on your investment if interest rates don’t change. What is the HPY on your investment?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the current value of a share CCSI stock

CCS Inc. currently plays no dividends, but intends to pay a $12.00 per share dividend three years from today. However, CCSI expects earnings and dividends to decrease 5% annually thereafter. If the required rate of return for stocks with similar risk..

  Residual dividend policy-what will be total dividend payment

The Mallie Company has planned capital expenditures that total $2,000,000. The Mallie Company wants to maintain a target capital structure that is 35% debt and 65% equity. The Mallie Company forecasts that its net income this year will be $1,800,000...

  What is the percentage change in the price of these bonds

Both Bond Bill and Bond Ted have 10 percent coupons, make semi annual payments, and are priced at par value. Bond Bill has 3 years to maturity, whereas Bond Ted has 20 years to maturity. If interest rates suddenly rise by 3 percent, what is the perce..

  Arithmetic average annual return on large-company stocks

Consider the following information on large-company stocks for period of years. What was arithmetic average annual return on large-company stocks in real terms.

  What would be the value of the convertible bond

What would be the value of the convertible bond it were merely a straight bond without any conversion option? What is the conversion value of the bond?

  Financed by risk-free debt

A company is 35% financed by risk-free debt. The interest rate is 12%, the expected market risk premium is 9%, and the beta of the company's common stock is 1.5. What is the company cost of capital? What is the after-tax WACC, assuming that the compa..

  Net futa tax and suta tax

Assume that in 2016, an employer had charged the wages account for $79,850. Of this amount, $720 will not be paid until the first payday in 2017. Further, the wages actually paid to employees in 2016 in excess of $7,000 each amounted to $29,840. Net ..

  Cost of equity is incorrect percent

Stock in Country Road Industries has a beta of .85. The market risk premium is 8 percent, and T-bills are currently yielding 5 percent. The company's most recent dividend was $1.60 per share, and dividends are expected to grow at a 6 percent annual r..

  Tamping plant projects required rate of return

ABC Manufacturing Company will invest in a stamping plant in Madison Ohio. The plant requires an initial outlay of $20,000,000. Net cash inflows from the project are expected to be $10,000,000 for the first year, $8,000,000 for year 2, and $5,000,000..

  Multiple rates of return

The Ulmer Uranium Company is deciding whether or not to open a strip mine whose net cost is $4.4 million. What is the project's MIRR at r = 14%?

  Calculate the return on equity using the dupont analysis

MFE 6110 Module 4, Case - Additional Ratio Analyses. Using Exhibit 17 in your book, calculate the Return on Equity using the DuPont Analysis for the companies

  The current price of a common share

To expand his portolio, Jorge recently purchased 275 shares of common stock in the Wellington Industries. The current market price of Wellington's common stock is $22.25 per share. Jorge's total wealth from his investment in Wellington Industries is:..

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