Mary's portfolio consists of two stocks. She invested $5,000 in BCD stock and $5,000 in EFG stock. Which of the following best fits your opinion about the standard deviation of her portfolio returns if the standard deviations of BCD and EFG returns are 12% and 15% respectively? 13.5% ○ 14% O13% O indeterminate.

Mary's portfolio consists of two stocks. She invested $5,000 in BCD stock and $5,000 in EFG stock. Which of the following best fits your opinion about the standard deviation of her portfolio returns if the standard deviations of BCD and EFG returns are 12% and 15% respectively? 13.5% ○ 14% O13% O indeterminate.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

An individual has $30,000 invested in a stock with a beta of 0.7 and another $30,000 invested in a stock with a beta of 1.4. If these are the only two investments in her portfolio, what is her portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.
Hyacinth Macaw invests 50% of her funds in stock I and the balance in stock J. The standard deviation of returns on I is 15%, and on J it is 20%. Note: Use decimals, not percents, in your calculations. a. Calculate the variance and standard deviation of portfolio returns, assuming the correlation between the returns is 1. b. Calculate the variance and standard deviation of portfolio returns, assuming the correlation is 0.3. c. Calculate the variance and standard deviation of portfolio returns, assuming the correlation is 0. Note: For all requirements, do not round intermediate calculations. Round your answers to 4 decimal places. a. Variance Standard deviation b. Variance Standard deviation c. Variance Standard deviation
Teena is considering investing in Stock A and stock B. She plans to invest $ 25,000 in the low risk stock and $ 50,000 in the high-risk stock. You have been given the following information about these two stocks in the table below:StockABE(R)15%10?25%22%Correlation between A and B0.20Based on the given information above, you are required to:i. Calculate the portfolio weightsii. Calculate the portfolio return.iii. Calculate the portfolio risk.iv. Compare portfolio risk with the individual stock risks and identify the benefit of the diversification of the portfolio.
Mary, a finance student at Amity student, holds a portfolio which consists three stocks (one each) of: stock A, stock B, and stock C. Please note the following information about these stocks: Price Return Stock A Stock B $120 20% Standard deviation 0.35 Correlation between A and B Correlation between B and C a- Questions: $84 15% 0.1 0.3 Correlation between A and C 0.4 0.2 Stock C $96 10% 0.5 Please calculate the portfolio's expected return b- and standard deviation Please calculate the portfolio's variance
Mr. Jones has a 2-stock portfolio with a total value of $550,000. $185,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 19.10%, Stock B is 8.95%, and correlation between Stock A and Stock B is –0.90, what would be the expected risk on Mr. Jones’ portfolio (standard deviation of the portfolio return)?Calculate with at least 4 decimal places and round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72. A. 3.31% B. 2.80% C. 2.16% D. 3.14% E. 3.00% check_circle
A person has $25,000 invested in a stock with a beta of 0.6 and another $75,000 invested in a stock with a beta of 2.5. If these are the only two investments in her portfolio, what is her portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.
You own a portfolio that has $1,600 invested in Stock A and $2,700 invested in Stock B. Assume the expected returns on these stocks are 11 percent and 17 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Mr. Jones has a 2-stock portfolio with a total value of $540,000. $195,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 16.60%, Stock B is 12.40%, and correlation between Stock A and Stock B is –0.40, what would be the expected risk on Mr. Jones’ portfolio (standard deviation of the portfolio return)?
Mrs. Landis has a 2-stock portfolio with a total value of $520,000. $175,000 is invested in Stock A with a beta of 1.25 and the remainder is invested in Stock B with a beta of 1.25. What is her portfolio's beta?Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72. Group of answer choices 1.01 1.30 1.25 1.39 1.15
Hyacinth Macaw invests 46% of her funds in stock I and the balance in stock J. The standard deviation of returns on I is 10%, and on J it is 30%. (Use decimals, not percents, in your calculations.) a. Calculate the variance of portfolio returns, assuming the correlation between the returns is 1. (Do not round intermediate calculations. Round your answer to 4 decimal places.) b. Calculate the variance of portfolio returns, assuming the correlation is 0.6. (Do not round intermediate calculations. Round your answer to 4 decimal places.) c. Calculate the variance of portfolio returns, assuming the correlation is 0. (Do not round intermediate calculations. Round your answer to 4 decimal places.)
Mr. Jones has a 2-stock portfolio with a total value of $550,000. $185,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 19.10%, Stock B is 8.95%, and correlation between Stock A and Stock B is –0.90, what would be the expected risk on Mr. Jones’ portfolio (standard deviation of the portfolio return)?Calcualte with at least 4 decimal places and round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72. A. 3.31% B. 2.80% C. 2.16% D. 3.14% E. 3.00%
Mrs. Landis has a 2-stock portfolio with a total value of $530,000. $175,000 is invested in Stock A with a beta of 1.55 and the remainder is invested in Stock B with a beta of 1.25. What is her portfolio's beta?Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72. A. 1.17 B. 1.35 C. 1.59 D. 1.27 E. 1.46

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS