Calculate the expected return, variance, and standard deviation for a portfolio of four equally weighted stocks with returns of 26.4%, -9.2%, 2.9%, and 22.0%
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- Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 28 percent, and Stock I, an international company, with an expected return of 16 percent and a standard deviation of 38 percent. The correlation between the two stocks is -0.1. What is the weight of stock D in the minimum variance portfolio?Consider the following returns. The variance on a portfolio that is made up of 56% Stock X and 44% Stock Y is closest to:Suppose Stock A has an expected return of 18% and a variance of 0.17, while Stock B has an expected return of 11% and a variance of 0.056. The covariance between Stocks A and B is -0.075. What is the expected return and standard deviation of a portfolio with 60% in A and 40% in B?
- Using the data in the following table,, and the fact that the correlation of A and B is 0.81, calculate the volatility (standard deviation) of a portfolio that is 65% invested in stock A and 35% invested in stock B. The return of stock A is 4.33 %. (Round to two decimal places.) The return of stock B is 12.50 %. (Round to two decimal places.) The variance of stock A is 0.00632. (Round to five decimal places.) The variance of stock B is 0.02743. (Round to five decimal places.) The standard deviation of stock A is 8.71%. (Round to two decimal places.) The standard deviation of stock B is 18.14%. (Round to two decimal places.) The variance of the portfolio of 65% stock A and 35% stock B is 0.02388. (Round to f The standard deviation of the portfolio of 65% stock A and 35% stock B is%. (Rour Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Realized Returns Year 2017 2018 2019 2020 2021 2022 Stock A - 2% 16% 8% - 8% 2% 10% Print Done Stock B 13% 38%…Suppose the index model for stocks A and B is estimated with the following results:rA = 2% + 0.8RM + eA, rB = 2% + 1.2RM + eB , σM = 20%, and RM = rM − rf . The regressionR2 of stocks A and B is 0.40 and 0.30, respectively.(a) What is the variance of each stock? (b) What is the firm-specific risk of each stock? (c) What is the covariance between the two stocks?Suppose the index model for stocks A and B is estimated with the following results: rA = 2% + 0.8RM + eA, rB = 2% + 1.2RM + eB, σM = 20%, and RM = rM − rf . The regression R2 of stocks A and B is 0.40 and 0.30, respectively. Answer the following questions. Total: (a) What is the variance of each stock? (b) What is the firm-specific risk of each stock? (c) What is the covariance between the two stocks?
- The standard deviation of return on stock A is 15% and the standard deviation on stock B is 15%. The correlation coefficient between the returns on stock A and B is -.25%. The rate of return for stocks A and B is 15% and 15% respectively. What is the standard deviation of return on the minimum-variance portfolio? a) 11.73% b) 12.00% c) 8.80% d) 9.35%Give typing answer with explanation and conclusion Assume that two stocks are available. The first stock (Stock A) has an expected return of 25% and a standard deviation of 20%; the second stock (Stock B) has an expected return of 12% and a standard deviation of 10%. If the correlation between the stocks is 0.10, what are the weight of Stock A (WA) and Weight of Stock B(WB) in the minimum-variance portfolio? WA=17.39%, WB=82.61% WA=14.29%, WB=85.71% WA=10.30%, WB=89.70% WA=30.25%, WB=69.75%Assume that the following data available for the portfolio, calculate the expected return, variance and standard deviation of the portfolio given stock A accounts for 45% and stock B accounts for 55% of your portfolio? A B Expected return 12.5% 18.5% Standard Deviation of return 15% 20% Correlation of coefficient (p) 0.4
- Assume that the following data available for the portfolio, calculate the expected return,variance and standard deviation of the portfolio given stock A accounts for 45% and stockB accounts for 55% of your portfolio? A BExpected return 12.5% 18.5%Standard Deviation of return 15% 20%Correlation of coefficient (p) 03. Consider two stocks A and B with expected returns of 6% (stock A) and 8% (stock B). The matrix of variances and covariances is presented below: Stock A В A 0.0064 -0.008 B -0.008 0.01 a. Write the variance of the portfolio composed of A and B as a function of the proportion x invested in stock A. (1-x) is invested in B. Short sales are not allowed on the market. b. Write the variance of the portfolio composed of A and B as a function of the portfolio's expected return. c. What are the proportions invested in the minimum risk portfolio composed of A and B? d. Draw the graph of the portfolios combining A and B in a (V, E) space. V=variance, E=expected return. e. If the standard deviation of the pf is 7% what proportions were invested in A and B?The probability distribution of returns for the two stocks X and Y are as follows: Probability 0.1 0.3 0.05 0.25 0.15 0.15 For each of the two stocks, calculate: a. The expected return. b. Variance of returns c. Volatility of returns. Stock X 0.05 -0.1 0.08 -0.08 0.20 0.12 Return Stock Y 0.13 0,04 -0.12 0.21 0.1 -0.05