Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Karma Energy has a stock volatility of 10%. Faust Corp. has a stock volatility of 22% and a correlation in returns of 0.5 with Karma Energy. The volatility of a portfolio that is equally invested in Karma Energy and Faust Corp. is closest to:
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12.2% |
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9.1% |
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14.2% |
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3.6% |
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- A portfolio has 45% of its value in IBM shares and the rest in Microsoft (MSFT). The valability of IBM and MSFT are 40% and 30%, respectively, and the correlation between 1BM and MSFT is -0.1. What is the standard deviation of the portfolia? OA 25.56% OB. 22.08% OC. 23.24% OD. 20.91%arrow_forwardSuppose General Motors stock has an expected return of 15% and a volatility of 38%, and Molson-Coors Brewing has an expected return of 12% and a volatility of 32%. If the two stocks are uncorrelated, a. What is the expected return and volatility of a portfolio consisting of 83% General Motors stock and 17% of Molson-Coors Brewing stock? b. Given your answer to (a), is investing all of your money in Molson-Coors stock an efficient portfolio of these two stocks? c. Is investing all of your money in General Motors an efficient portfolio of these two stocks?arrow_forwardConsider a portfolio with stocks A, B, and C. The total value of the portfolio is $245,000 and it is fully invested in these 3 stocks. $85,653 is invested in A and $69,552 is invested in B. The Betas of stocks A, B, and C are 1.2, .8, and 1.62, respectively. What is the Beta of the portfolio overall?arrow_forward
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