Assuming you are an investor with GHS100 available. If you invest GHS60 and GHS40 in Allos Inc. and Orangus Inc. respectively, what will be your portfolio returns? 4.Calculate the Standard deviation of the portfolio
Assuming you are an investor with GHS100 available. If you invest GHS60 and GHS40 in Allos Inc. and Orangus Inc. respectively, what will be your portfolio returns? 4.Calculate the Standard deviation of the portfolio
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter7: Corporate Valuation And Stock Valuation
Section: Chapter Questions
Problem 25SP: Start with the partial model in the file Ch07 P25 Build a Model.xlsx on the textbook’s Web site....
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Question
Assuming you are an investor with GHS100 available. If you invest GHS60 and GHS40 in Allos Inc. and Orangus Inc. respectively, what will be your portfolio returns?
4.Calculate the Standard deviation of the portfolio.
Transcribed Image Text:• Suppose financial analysts believe that there are four equally likely states
of the economy: depression, recession, normal, and boom. The returns
on the Supertech Company are expected to follow the economy closely,
while the returns on the Slowpoke Company are not. The return
predictions are as follows:
States of the economy
Depression
-20%
5%
Recession
10%
20%
Normal
30%
-12%
Boom
50%
9%
• Required:
For each company calculate:
the expected returns
1.
i.
ii.
the Variance
the Standard deviation
2.
For each company calculate and explain:
i.
The covariance
ii.
The correlation
Assuming you are an investor with GHS100 available. If you invest
GHS60 and GHS40 in Allos Inc. and Orangus Inc. respectively, what
will be your portfolio returns?
Calculate the Standard deviation of the portfolio.
3.
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