Two investments, X and Y, have the characteristics shown below.E(X) = $60, E(Y) = $90, o = 10,000, o? = 17,000 and axy = 6,500If the weight of portfolio assets assigned to investment X is 0.8, calculate thea. portfolio expected return andb. portfolio risk.a. If the weight of portfolio assets assigned to investment X is 0.8, the portfolio expected return is $(Type an integer or a decimal.)b. If the weight of portfolio assets assigned to investment X is 0.8, the portfolio risk is approximately $.(Round to two decimal places as needed.)

Here given expected return of two investments and standard deviation of them

Answered: a. If the weight of portfolio assets…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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1. ABC inc. stock is currently selling for $30, one year from today the stock price can either increase by 20% or decrease by 15%. The probability of an increase in the stock price is equal to 0.3. The one-year risk-free rate is 5% What is the value of a European put that expires in one year with an exercise price of $24. 2. Graphically, show the value and the profit and loss of the following butterfly position: Long in a call with an exercise price of $30, short in 2 calls with an exercise price of $45, and long in a call with an exercise price of 60. All calls are written on the same stock and have the same maturity. 3. "Early exercise of an American option on a stock that does not pay any dividend is not optimal regardless of whether the option is a Call or a Put". True, False, or Uncertain. Explain.
today's and yesterday's prices. Price changes were examined for 109 days. A financial theory states that the price change of today for a stock must be independent of yesterday's price change. Test the hypothesis that daily stock price changes for this stock are independent. Let a = 0.10. Change Today Day Up No Change Down Up No Change 8 10 15 9. Down 14 16 Determine the null and alternative hypotheses for the test. Choose the correct answer below. O A. Ho: Today's price change and yesterday's price change have equal proportions. HA Today's price change and yesterday's price change have non-equal proportions. O B. Ho: Today's price change and yesterday's price change are independent. HA: Today's price change and yesterday's price change are not independent. O C. Ho: Today's price change and yesterday's price change have non-equal proportions. HA Today's price change and yesterday's price change have equal proportions. O D. Ho: Today's price change and yesterday's price change are not…
Consider the following data: Stock M N Average return 26% 16% Risk (Std. Dev.) 20% 10% If the return on stocks M and N are perfectly negatively correlated, what is the range of risk (std dev) associated with all possible portfolio combinations? A. Range of the risk: between 0= risk s10 % OB. Range of the risk: between 0 < risk 10% OC. Range of the risk: between 5% and 10%. OD. Range of the risk (std. dev): between 15% to 20% OE. None of the above
is the following correct?
After an automobile is 1 year old, its rate of depreciation at any time is proportional to its value at that time. If an automobile was purchased on March 1, 2022, and its values on March 1, 2023 and March 1, 2024, were $7000 and $5800 respectively, what is its expected value on March 1, 2028?
I need help with part b, c and d
From the data in the table it shows the 2019 daily return data for the S&P 500 Index (stocks) and the US 30 year Bond (bonds). How do I test the hypothesis that mean daily return on stocks exceeds the mean daily return on bonds? Please show the steps. S&P500 dailt returns data: Date Price Daily Return 2019-12-31 3230.78 0.294602% 2019-12-30 3221.29 -0.578082% 2019-12-27 3240.02 0.003398% 2019-12-26 3239.91 0.512817% 2019-12-24 3223.38 -0.019545% 2019-12-23 3224.01 0.086614% 2019-12-20 3221.22 0.494478% 2019-12-19 3205.37 0.445929% 2019-12-18 3191.14 -0.043230% 2019-12-17 3192.52 0.033529% US 30 Year Bond Date Price Daily Return 31-Dec-19 2.389 2.32% 30-Dec-19 2.335 0.78% 29-Dec-19 2.317 -0.03% 27-Dec-19 2.318 -0.16% 26-Dec-19 2.321 -0.71% 25-Dec-19 2.338 0.15% 24-Dec-19 2.334 -0.83% 23-Dec-19 2.354 0.31% 22-Dec-19 2.346 0.12% 20-Dec-19 2.344 -0.43%
Q3. Suppose that the market default rate for bonds is given by 0.01, i.e., the probability the market believes that the company may not be able to pay the owner of the bonds is 0.01. Now a credit default swap (CDS) is sold at fair price $ 0.01 per unit. Ackman expects that the true default rate is 0.05, not 0.01. Ackman bought 67 billion units of CDS at the price $ 0.01 per unit. a. Suppose that Ackeman's expectation about the default rate is not correct. I.e., the true default rate for bonds is given by 0.01. Find the cost of the purchase. Find the expected payoff. Find the profit. b. Suppose that Ackeman's expectation is correct. Find the cost of the purchase. Find the expected payoff. Find the profit.
3. Suppose Par = $10,000,000; PO = $7,500,000; T = 3; d = 0.006; m = 0.7 and π = 0.5. Then what is the expected zero rate? * O a. 9.97% pa. O b. 8.92% pa. O c. 7.92% pa. O d. 9.64% pa. O e. 9.92% pa.
Given the statement: In 6 trading days, the stock price rose $29.59. How rapidly, on average, has the stock price changed on a daily basis?

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a. If the weight of portfolio assets assigned to investment X is 0.8, the portfolio expected return is S (Type an integer or a decimal.) b. If the weight of portfolio assets assigned to investment X is 0.8, the portfolio risk is approximately s (Round to two decimal places as needed.)