What is the standard deviation of the portfolio

Assignment Help Business Management
Reference no: EM13971501

Suppose that the index model for stocks A and B is estimated from excess returns with the following results:

RA = 1.5% + 0.55RM + eA
RB = 1.4% + 0.6RM + eB
A?A?M = 18%; R-squareA = 0.25; R-squareB = 0.16

Assume you create portfolio P with investment proportions of 0.60 in A and 0.40 in B.

1. What is the standard deviation of the portfolio? (Do not round your intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.)

2. What is the beta of your portfolio? (Do not round your intermediate calculations. Round your answer to 2 decimal places.)

3. What is the firm-specific variance of your portfolio? (Do not round your intermediate calculations. Round your answer to 4 decimal places.)

4. What is the covariance between the portfolio and the market index? (Do not round your intermediate calculations. Round your answer to 3 decimal places.)

Reference no: EM13971501

Questions Cloud

Prepare a monthly payment schedule showing the monthly : Pittman Corporation purchased a building by signing a $75,000 long-term mortgage with monthly payments of $1,000. The mortgage carries an interest rate of 12 percent. Prepare a monthly payment schedule showing the monthly payment, the interest for th..
Tools and techniques for collecting real or anticipated data : A brief evaluation of the most appropriate tools and techniques for collecting real or anticipated data for your OIP. An explanation of why the data collection tool you have chosen is best suited for your OIP
Which expenses are budgeted to increase the most : Telephone and mailing expenses are scheduled to increase by 8 percent even with no change in sales volume. However, these costs are variable with the number of units sold, as are packaging and delivery costs.
Why are ratings important to businesses that issue bonds : What is the difference between an A-rated bond and a B-rated bond? Why are ratings important to businesses that issue bonds?
What is the standard deviation of the portfolio : What is the standard deviation of the portfolio? (Do not round your intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.)
Propose a taxable acquisition structure : Compare the long-term tax benefits and advantages of each type of reorganization, and recommend the type of reorganization that will be most beneficial to the client - Examine the value and limitations of including the ABC Corporation
How to create a video story with premiere pro : "How to create a video story with Premiere Pro" Video needs to be about lululemon. Basic information as a marketing tool is perfect
Who are the stakeholders in this situation : How might the partnership agreement be revised to accommodate the differences in Alexandra's and Kellie's work and withdrawal habits
Design substantive procedures for detecting irregularities : Design substantive procedures for detecting inventory irregularities. Design substantive procedures for detecting irregularities in fixed assets.

Reviews

Write a Review

Business Management Questions & Answers

  How is the object approach different from the data and

part 1 answer the module review questions listed below. these questions were chosen to demonstrate your understanding

  Estimation forecasting and auditing correlations

Cost estimation forecasting and auditing correlations - importance of auditing often goes undervalued in many of today's struggling organizations.

  Assume that francey gordon goes to karen gross

Assume that Francey Gordon goes to Karen Gross and Frank Johnson to discuss the matter Gordon tells Gross and Johnson that just because the freight forwarder indicates the merchandise is picked up on December 31 that doesn’t justify reporting the rev..

  Content theories and process theoriesshow some differences

content theories and process theoriesshow some differences between content theories and process theories include how

  What questions should be ask when evaluating the hypothesis

what questions should be ask when evaluating the hypothesis of a researchwhat questions should be ask when evaluating

  Deliberate some of the different perspectives on motivation

Deliberate some of the different perspectives on motivation as well as explain which perspective you find most compelling, and why. Utilizing the perspective you found most compelling define how managers might utilize

  Attributes of the organisational culture

Write a Discussion Paper for the General Manager setting out the attributes of the organisational culture that will position the hotel in this new market. The Discussion paper is to be no longer than 500 words.

  Create project activities list and network diagram

Create Project Activities List and Network Diagram

  Explain how you account for those themes

Explain how you account for those themes and what relationships do you see between your peers' assessment results, the skills they acquired, and the skills they still need to work on?

  Define the pros and cons of the approach nibco

Define the pros and cons of the approach to implementation decided upon by NIBCO. Provide your analysis as well as recommendation for how the project was managed including its management structure.

  Preferred customers during product ramp-up

1. Why would a company want to supply a product to preferred customers during product ramp-up? 2. What is a company trying to optimize in the most common approach to developing a workcenter layout?

  The nature of the domestic and global issues in the external

The nature of the domestic and global issues in the external environment surrounding the Mondelez international (Kraft). what is the Porter Five-Forces Model that the Mondelez International Used; also analyze the environment under all environ..

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