Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. q4. suppose you develop a mutual fund that include

Q4. Suppose you develop a mutual fund that includes 500 NASDAQ stocks, all with equal weights...

70.2K

Verified Solution

Question

Finance

Q4. Suppose you develop a mutual fund that includes 500 NASDAQstocks, all with equal weights in the fund's portfolio. The averagereturn standard deviation of the stocks is 44 percent, and theaverage pairwise correlation among the stocks is 0.30. What is yourestimate of the standard deviation of the fund's portfolio?

Answer & Explanation Solved by verified expert
3.9 Ratings (632 Votes)
No of stocks in the portfolio 500 weights of all the stocks in the portfolio are equal w therefore w1 w2 w3 w500 1500 1 2 3 500 044 average standard deviation of the stocks is 044 and    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Q4. Suppose you develop a mutual fund that includes 500 NASDAQstocks, all with equal weights in the fund's portfolio. The averagereturn standard deviation of the stocks is 44 percent, and theaverage pairwise correlation among the stocks is 0.30. What is yourestimate of the standard deviation of the fund's portfolio?

Other questions asked by students

Q

9 Using the data from this simulation what conclusions can you make about the relationship...

Biology
Q

why is the lattice energy of potassium bromide more exothermic than the lattice energy of rubidium...

Chemistry
Q

Select a social problem such as drug abuse, crime, or suicide, and indicate how functionalist, conflict,...

Psychology
Q

If he were advising a group designing a suicide prevention program, Durkheim would be most...

Biology
Q

cos 7 Evaluate the expression sin 1

Basic Math
Q

The formula for the perimeter of a rectangle is P = 2(1 + w) and...

Basic Math
Q

Do college students enjoy playing sports just as much as watching sports A researcher randomly...

Statistics
Q

Solve 2 34 32 6 2y 22 0 2 3

Algebra
Q

Periodic inventory by three methods; cost of goods sold The units of...

Accounting
Q

true or false

Accounting
Q

Kopecky Industries Inc. is considering allocating a limited amount of capital investment funds among four...

Accounting
Q

Cash DiscountsPrianka Porter manages Studio Sound, an audio components specialty shop.Prianka is negotiating a $25000...

Accounting