What is the standard deviation of the market portfolio

Assignment Help Financial Management
Reference no: EM13849644

In a two-stock capital market the capitalization of stock X is twice that of stock Y (this should tell you what the weights of stocks X and Y are in the economy). The standard deviation of excess returns on stock X is 35% and 55% on stock Y. the correlation coefficient between the excess returns is 0.75. What is the standard deviation of the market portfolio?

Reference no: EM13849644

Questions Cloud

What about automatic toll payent technology : What about automatic toll payent technology (such as E-Zpass) that allows you to move more quickly through highway toll gates but also collect information on where you go and when you get there
Which of the two loans would make more money for the bank : As a loan officer, you offer the customer the loan if they agree to pay $19,500 in interest, plus agree to pay the $230,000 back at the end of one year. What is the APR? As an alternative you offer them a one-year, $230,000 discount loan at 9 percent..
Standard deviation of the rate of return on new portfolio : You are the portfolio manager for a mutual fund. Your fund has an expected return of 15% with a standard deviation of 24% and the T-bill rate is 3%. Calculate the weight w. What is the standard deviation of the rate of return on the new portfolio?
Key differences between a nursing theory and a conceptual mo : key differences between a nursing theory and a conceptual model
What is the standard deviation of the market portfolio : In a two-stock capital market the capitalization of stock X is twice that of stock Y (this should tell you what the weights of stocks X and Y are in the economy). The standard deviation of excess returns on stock X is 35% and 55% on stock Y. the corr..
Companies raise long-term funds or capital for new projects : Companies raise long-term funds or capital for new projects through which of the following markets? The federal reserve is the governmental organization responsible for______. An increase in the value of the dollar relative to all foreign currencies ..
Calculate percent interest rate or effective cost of loan : The following are three one year "discount" loans that a bank might offer to the customer. Determine the amount of interest the bank would make on each loan and indicate the amont of net proceeds that the bank would pay our on each loan. On which loa..
Calculate the equity capital ration : Calculate the equity capital ration. If 2 billion in bad loans were removed from the bank's assets, show how the equity capital ratio would change.
Total amts that make banks balance sheet balance : Second National Bank Balance Sheet as of _____date (figures in million$) Assets: Cash assets: 5 Government Securities owned: 7 Loan secured by real estate: 30 Commercial industrial loans : 18 Bank fixed assets: 14 Total Assets 74 Liabilities Federal ..

Reviews

Write a Review

Financial Management Questions & Answers

  What is annual rate of return with continuous compounding

The interest rates in Canada and the United States are 6% and 5% per annum, respectively, with continuous compounding. The spot price of the Canadian dollar is $0.8000.

  Requires an initial fixed asset investment

Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.76 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be wort..

  Bergman is aware that there are some qualitative factors

Jules Bergman is aware that there are some qualitative factors that are relevant to the surgery center decision. What qualitative factors might support project acceptance? What qualitative factors might preclude project acceptance?

  What nominal annual interest rate will you be earning

You agree to make 24 deposits of $500 at the beginning of each month into a bank account. At the end of the 24th month, you will have $13,200 in your account. If the bank compounds interest monthly, what nominal annual interest rate will you be earni..

  What is the tax-equivalent yield of a double tax-free

A bond matures in 30 years, has a 20 year duration and a yield to maturity of 9.32%. The change in the level of the market interest rate is 0.47%. What is the modified duration and the percentage change in price? What is the tax-equivalent yield of a..

  Fama-french three-factor model

A financial analyst has modelled the stock of the company using a Fama-French three-factor model. The risk-free rate is 5%; the market return is 10%; the return on the SMB portfolio (rSMB) is 3.8%; and the return on the HML portfolio (rHML) is 4.7%. ..

  Required rate of return-stock worth

The next year the common stock of Silver Corp will pay a dividend of $9.64 per share. If the company is growing at a rate of 4.69 percent per year, and your required rate of return is 10.39 percent, what is Silver company stock worth to you?

  What is the companys cost of issuing new preferred stock

A Company’s perpetual preferred stock sells for $102.50 per share, and pays a $9.50 annual dividend. If the company were to issue a new preferred issue, a flotation cost of 4.00% would be paid to the investment bankers. What is the company's cost of ..

  Find out the nation''s gross domestic product

consumption allowances were 4 billion; personal savings were estimated at $2 billion; imports of goods and services amounted to $6.5 billion; and the exports of goods and services were $5 billion. a. Determine the nation's gross domestic product.

  Fresh off excitement-investment using straight line method

Fresh off the excitement of the 2012 London Olympic Games, you decide that you want your firm to take advantage of the profits to be made for the 2016 games in Rio de Jeneiro. This $6 million is the after-tax terminal value that is in year 4 (that is..

  Suppose your friend pat approaches you with a plan to get

suppose your friend pat approaches you with a plan to get in on the solar panel leasing business. pat has identified an

  What is the yield to maturity for three-year coupon bond

Suppose you observe a 1-year zero-coupon Treasury security trading at a yield to maturity of 5%. You also have a 2-year T-note with a 6% coupon trading at a yield to maturity of 5.5%. And, finally, you observe a risk-free 3-year annuity with an annui..

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