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 01:30

Consider the following limit order book for a share of stock. the last trade in the stock occurred at a price of $50. limit buy orders limit sell orders price shares price shares $49.75 500 $49.80 100 49.70 900 49.85 100 49.65 700 49.90 300 49.60 400 49.95 100 48.65 600 a. if a market buy order for 100 shares comes in, at what price will it be filled? (round your answer to 2 decimal places.) b. at what price would the next market buy order be filled? (round your answer to 2 decimal places.) c. if you were a security dealer, would you want to increase or decrease your inventory of this stock? increase decrease

Answers: 2

Answer

Business, 22.06.2019 05:00

One question from a survey was "how many credit cards do you currently have? " the results of the survey are provided. complete parts (a) through (g) below. click the icon to view the survey results. (a) determine the mean number of credit cards based on the raw data. the mean is 3.113.11 credit cards. (type an integer or a decimal. do not round.) (b) determine the standard deviation number of credit cards based on the raw data. the standard deviation is 1.9111.911 credit cards. (round to three decimal places as needed.) (c) determine a probability distribution for the random variable, x, the number of credit cards issued to an individual. x (# of cards) p(x) x (# of cards) p(x) 1 0.280.28 6 nothing 2 nothing 7 nothing 3 nothing 8 nothing 4 nothing 9 nothing 5 nothing 10 nothing (type integers or decimals. do not round.)

Answers: 2

Answer

Business, 22.06.2019 11:00

T-comm makes a variety of products. it is organized in two divisions, north and south. the managers for each division are paid, in part, based on the financial performance of their divisions. the south division normally sells to outside customers but, on occasion, also sells to the north division. when it does, corporate policy states that the price must be cost plus 20 percent to ensure a "fair" return to the selling division. south received an order from north for 300 units. south's planned output for the year had been 1,200 units before north's order. south's capacity is 1,500 units per year. the costs for producing those 1,200 units follow

Answers: 1

Answer

Business, 22.06.2019 11:10

Use the following account numbers and corresponding account titles to answer the following question. account no. account title (1) cash (2) merchandise inventory (3) cost of goods sold (4) transportation-out (5) dividends (6) common stock (7) selling expense (8) loss on the sale of land (9) sales which accounts would appear on the income statement?

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