Business, 09.04.2020 20:58 Naysa150724

Consider the following case: Andre is an amatuer investor who holds a small portfolio consisting of only four stocks. The stock holdings in his portfolio are shown in the following table: |Stock|Percentage of Portfolio|Expected Return|Standard Deviation

Artemis Inc. 20% 6.00% 38.00%
Babish & Co. 30% 14.00% 42.00%
Cornell Industries 35% 11.00% 45.00%
Danforth Motors 15% 3.00% 47.00%
What is the expected return of Andre's stock portfolio?

a.) 14.55%
b.) 7.28%
c.) 13.10%
d.) 9.70%

Suppose each stock in the preceding portfolio has a correlation coefficient of 0.4 (p=0.4) with each of the other stocks. The market's average standard deviation is around 20% and the weighted average of the risk of the individual securities in the partially diversified portfolio of four stocks is 43%. If 40 additional, randomly selected stocks with a correlation coefficient of 0.3 with the other stocks in the portfolio were added to the portfolio, what effect would this have on the portfolio's standard deviation?

a.) It would gradually settle at about 20%.

b.) It would gradually settle at about 35%.

c.) It would decrease gradually, settling at about 0%.

d.) It would stay constant at 43%.

Answers: 3

Show answers

Another question on Business

Business, 22.06.2019 08:50

Suppose that in an economy the structural unemployment rate is 2.2 percent, the natural unemployment rate is 5.3 percent, and the cyclical unemployment rate is 2 percent. the frictional unemployment rate is percent and the actual unemployment rate (in this economy) is percent.

Answers: 2

Answer

Business, 22.06.2019 19:30

Quick calculate the roi dollar amount and percentage for these example investments. a. you invest $50 in a government bond that says you can redeem it a year later for $55. use the instructions in lesson 3 to calculate the roi dollar amount and percentage. (3.0 points) tip: subtract the initial investment from the total return to get the roi dollar amount. then divide the roi dollar amount by the initial investment, and multiply that number by 100 to get the percentage. b. you invest $200 in stocks and sell them one year later for $230. use the instructions in lesson 3 to calculate the roi dollar amount and percentage. (3.0 points) tip: subtract the initial investment from the total return to get the roi dollar amount. then divide the roi dollar amount by the initial investment, and multiply that number by 100 to get the percentage.

Answers: 2

Answer

Business, 22.06.2019 22:30

Aresearcher developing scanners to search for hidden weapons at airports has concluded that a new scanner isis significantly better than the current scanner. he made his decision based on a test using alpha equals 0.025 .α=0.025. would he have made the same decision at alpha equals 0.10 question mark α=0.10? how about alpha equals 0.01 question mark α=0.01? explain

Answers: 3

Answer

Business, 23.06.2019 01:50

Mart's boutique has sales of $820,000 and costs of $540,000. interest expense is $36,000 and depreciation is $59,000. the tax rate is 21 percent. what is the net income? $146,150 221,200 105,000 139,050

Answers: 3

Answer

You know the right answer?

Consider the following case: Andre is an amatuer investor who holds a small portfolio consisting of...

Questions