Suppose you have a portfolio consisting of two assets, A and B. Stock A has an expected return of 14% and a standard deviation of 31%. Stock B has an expected return of 10% and a standard deviation of 15%. Stocks A and B have a correlation of 0.98. Assuming you invest $7,000 in stock A and $3,000 in stock B, what is the standard deviation of your portfolio?     35.1%     19.4%     26.1%     14.1%

Q: You are creating a portfolio of two stocks. The first one has a standard deviation of 20% and the…

A: Standard deviation of portfolio is calculated as follows:-SDp =whereSDp = standard deviation of…

Q: You have a portfolio consisting solely of Stock A and Stock B. The portfolio has an expected return…

A: In this we have to calculate weighted average return of portfolio.

Q: What are the expected return and standard deviation of a portfolio invested 30% in Stock A and 70%…

A: Expected return from a portfolio is the weighted average of the return expected from individual…

Q: Assume your portfolio standard deviation is 8 whereas the market has a standard deviation of 6.8.…

A: First we need to determine the systematic risk using the formula below:

Q: If a portfolio had a return of 11%, the risk-free asset return was 6%, and the standard deviation of…

A: Risk premium = Portfolio Return - Risk free Asset Return

Q: Assume that you manage a risky portfolio with an expected rate of return of 18% and a standard…

A: The investment proportions of the individual assets are given above on the basis of 50% of…

Q: You own a portfolio that is 39.3% invested in Stock X, 40.7% in Stock Y, and 20% in Stock Z. The…

A: Expected Return of the Portfolio = Weight of X *Return of X + Weight of Y * Return of Y + Weight of…

Q: A portfolio combines two assets: X and Y. The proportion of Asset X in the portfolio is 25%, and the…

A: A portfolio refers to investments in two or more than two financial securities or assets. For…

Q: You have a portfolio consisting solely of Stock A and Stock B. The portfolio has an expected return…

A: Portfolio is the combination of stocks and securities being held in business. Portfolio return means…

Q: A portfolio has a total return of 4.5%, a standard deviation of 40%, and a beta of 0.5. The market…

A: Market return, Rm = 12%Standard deviation of market return = 20% Market's treynor measure = 0.10 We…

Q: A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 15%…

A: Investors often diversify their investment portfolios by including multiple assets to reduce risk.…

Q: You manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 36%.…

A: Given, Expected return = 17% Standard deviation = 36% T-bill rate = 6%

Q: You estimate that a passive portfolio, for example, one invested in a risky portfolio that mimics…

A: The Capital Market Line (CML) and the Capital Allocation Line (CAL), two ideas from contemporary…

Q: Your portfolio has two investments with a correlation of 0.4. Investment #1 is 35% of your portfolio…

A: The correlation coefficient of the two investments is 0.4Investment 1 is 35% of the portfolio and…

Q: You are investing in a portfolio consisting two shares - D and E. You plan to invest 70% of your…

A: the expected return of a portfolio is weighted average return of individual stocks or funds or…

Q: You have portfolio that comprises of two shares only: $500 Tesla shares and $700 Eagle shares. Below…

A: Total Investment = $500 Tesla shares  + $700 Eagle shares = $1200   W1 =Weight of Tesla =500/1200…

Q: You manage a risky portfolio with an expected rate of return of 22% and a standard deviation of 35%.…

A: A mixture of different kinds of funds and securities for the investment is term as the portfolio.

Q: You own a portfolio that has $16,000 invested in Stock A and $17,000 invested in Stock B. The…

A: Investment in stock A (A) = $16,000 Investment in stock B (B) = $17,000 Expected return on stock A…

Q: A portfolio has a total return of 4.5%, a standard deviation of 40%, and a beta of 0.5. The market…

A: Market return, Rm = 13.5%Standard deviation of market return = 20% Market's treynor measure = 0.10…

Q: Stock A has an expected return of 5% and a beta of .7. Stock B has an expected return of 9% and a…

A: Portfolio beta = (Weight of A * Beta of A) + ( Weight of B * Beta of B) Let's assume Weight of B = Y…

Q: "You manage a risky portfolio with an expected rate of return of 11% and a standard deviation of…

A: Return on risky portfolio = 11%Standard deviation (SD) = 37%T-bill return = 4%Expected return on…

Q: A portfolio is invested 27 percent in Stock G, 42 percent in Stock J, and 31 percent in Stock K. The…

A: The expected return of a portfolio refers to the sum of proportionate returns from each element of…

Q: Suppose you have $20,000 available to invest and the risk-free rate, as well as your borrowing rate,…

A: The complete portfolio is a combination of a risky portfolio and a risk-free asset with moderate…

Q: 1) Stock 1 has a standard deviation of return of 7%. Stock 2 has a standard deviation of return of…

A: Standard Deviation of Stock 1 (A)=7% Standard Deviation of Stock 2(B)= 1% Weight of stock 1(WA)=…

Q: You will have a portfolio that is only comprised of two assets. You plan to allocate 47.1% into…

A: Expected return on a portfolio refers to the anticipated gain or loss that an investor can expect…

Q: You manage a risky portfolio with an expected rate of return of 10% and a standard deviation of 29%.…

A: Risky portfolio rate of return (Re) = 10%Risky portfolio standard deviation (Se) = 29%T bill rate…

Q: What is the portfolio’s expected return?

A: A portfolio is the combination of different stocks, bonds and shares. The combination renders…

Q: Consider two high-risk stocks, X and Y. The expected return on stock Y is 16%, with a standard…

A: Computation of Expected Return as follows: The expected return of the portfolio =Weight of…

Q: You hold a portfolio consisting of two stocks. Stock Abc has an expected return of 209 and a…

A: expected return = 0.6*20% + 0.4*12% = 16.80%

Q: You have a portfolio that is invested 22 percent in Stock A, 32 percent in Stock B, and 46 percent…

A: Beta of portfolio is weighted average beta of individual stock's beta

Q: You manage a risky portfolio with an expected rate of return of 12% and a standard deviation of 38%.…

A: Information provided:Risky portfolio rate of return (Re) = 12%Risky portfolio standard deviation…

Q: 7. The standard deviation of stock A is 0.25 and the standard deviation of stock B is 0.30. The…

A: Portfolio refers to a combination or collection of financial instruments or securities stocks,…

Q: An investor wants to design a complete portfolio with an expected rate of return of 15% from two…

A: Portfolio return, risk and the optimal portfolio: The portfolio return is the sum of the products of…

Q: uppose you can form portfollos using only two stocks. Stock H and stock M, with the following…

A: Portfolio standard deviation is calculated by solving the following Equation:   σ port folio =…

Q: Asset 1 has a standard deviation of 0.10 and an expected return of 7%. Asset 2 has a standard…

A: Standard deviation of Asset 1 (sd1) = 0.10Expected return of Asset 1 (Er1) = 7%Standard deviation of…

Q: You manage a risky portfolio containing 25% of Stock A, 32% of Stock B and 43% of Stock C,…

A: A portfolio is a mix of various investment alternatives in which the investor put his money. The CAL…

Q: The expected return on a portfolio is 14%, and that the returns have a standard deviation of 10%.…

A: Value at Risk (VaR) is the worst possible case that can happen.It is the maximum loss that may…

Q: You calculated that the average retum of your portfolio is 3% and the standard deviation is 22%,…

A: The objective of this question is to calculate the Value at Risk (VaR) for a portfolio given the…

Q: Assume that you manage a risky portfolio with an expected rate of return of 20% and a standard…

A: Standard deviation is the quantitative measure of risk of stock return and is measured as the…

Q: Given You own a portfolio of two stocks, A and B. Stock A is valued at $10,500 and has an expected…

A: Portfolio refers to basket of different financial assets in which investment is made by single…

Q: Viation of return of 25 percent. Stock Y has a standard deviation of return of 5 percent. The…

A: Standard deviation of X=25%Standard deviation of Y=5%Correlation coefficient=0.5Weight of…

Q: A portfolio combines two assets: X and Y. The proportion of Asset X in the portfolio is 35%, and the…

A: A portfolio consists of two or more financial securities. The financial securities in a portfolio…

Q: The firm wishes to estimate the beta of a portfolio that consists of two assets X and Y. The…

A: Beta of the portfolio = wX * Beta_X + wY * Beta_Y   Where: wX = Weight of asset X in the portfolio,…