Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you have a portfolio with a standard deviation of

You have a portfolio with a standard deviation of 30 % and an expected return of...

60.1K

Verified Solution

Question

Finance

You have a portfolio with a standard deviation of 30 % and anexpected return of 18 %. You are considering adding one of the twostocks in the following table. If after adding the stock you willhave 30 % of your money in the new stock and 70 % of your money inyour existing? portfolio, which one should you? add?

Expected ReturnStandard DeviationCorrelation with Your Portfolio's Returns
Stock A15%23%0.3
Stock B15%17%0.6

Standard deviation of the portfolio with stock A is __%? (Roundto two decimal places)

Standard deviation of the portfolio with stock B is __%? (Roundto two decimal places)

Which stock would you add to your portfolio?

Answer & Explanation Solved by verified expert
4.3 Ratings (920 Votes)
As Adding both the stocks will give same Expected    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

You have a portfolio with a standard deviation of 30 % and anexpected return of 18 %. You are considering adding one of the twostocks in the following table. If after adding the stock you willhave 30 % of your money in the new stock and 70 % of your money inyour existing? portfolio, which one should you? add?Expected ReturnStandard DeviationCorrelation with Your Portfolio's ReturnsStock A15%23%0.3Stock B15%17%0.6Standard deviation of the portfolio with stock A is __%? (Roundto two decimal places)Standard deviation of the portfolio with stock B is __%? (Roundto two decimal places)Which stock would you add to your portfolio?

Other questions asked by students

Q

Mole fraction of n2 Mole fraction of o2 Answers given without the use of the given temperatures, pressures,...

Chemistry
Q

This photo was taken during Prohibition Based on that information and your own knowledge this...

Biology
Q

In the study of alternating electric current instantaneous voltage is modeled by the equation e...

Physics
Q

3 A current of 11 Amps 240 Volts flows through an electric range If it...

Physics
Q

1 1 66 points eBook Hint Print Determine the missing amount from each of the...

Basic Math
Q

A line has a slope of and passes through the point (-1, -10). What is...

Basic Math
Q

A study was made of seat belt use among children who were involved in car...

Statistics
Q

TRANSACTIONS April 1 Sold fully depreciated cash register and point of sale system for $1,000...

Accounting
Q

Yevmiye Defterine kaydedilecek aadaki kalemleri dikkate alarak YD'nizi hazrlamalsnz; 1 Ocak'ta, hissedarlardan bir miktar sermaye...

Accounting
Q

Bruce Corporatlon makes four producis in a single facility. These products have the following unit...

Accounting
Q

Which of the following one-year 1000 USD bank loans offers the lowest effective annual rate?...

Finance
Q

Bilboa Freightlines, S.A., of Panama, uses a truck for intracity deliveries that has worn out...

Accounting