You decide to invest in a portfolio consisting of 15 percent Stock X, 51 percent Stock Y, and the remainder in Stock Z. Based on the following information, what is the standard deviation of your portfolio? State of Probability of Economy Normal Boom State Economy .77 .23 Return if State Occurs Stock X Stock Y Stock Z 10.50% 17.80% 3.90% 25.80% 12.90% 17.30%

You decide to invest in a portfolio consisting of 15 percent Stock X, 51 percent Stock Y, and the remainder in Stock Z. Based on the following information, what is the standard deviation of your portfolio? State of Probability of Economy Normal Boom State Economy .77 .23 Return if State Occurs Stock X Stock Y Stock Z 10.50% 17.80% 3.90% 25.80% 12.90% 17.30%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You construct a two-stock portfolio using stock A and stock B. You invest $700 in stock A and $300 in stock B. The return standard deviation of stock A is 15%, that of stock B is 20%, and the return correlation coefficient between stock A and stock B is 0.6. The return standard deviation of your portfolio is _____. 13.57% 14.89% 16.50% 17.50%
A close family friend has approached you to help her determine which of the two common stocksshe should invest in. Common Stock A Common Stock BProbability Return Probability Return 0.3 11% 0.2 -5% 0.4 15% 0.3 6% 0.3 19% 0.3 14% 0.2 22%Required:a) Calculate the expected returns of stock A b) Determine the risk (standard deviation) and return of stock Ac) Calculate the expected returns of stock B d) Determine the risk (standard deviation) and return of stock Be) Which investment should your friend invest in?
step by step explaination (no excel)
You own a portfolio that is 21 percent invested in Stock X, 36 percent in Stock Y, and 43 percent in Stock Z. The expected returns on these three stocks are 9 percent, 12 percent, and 14 percent, respectively. What is the expected return on the portfolio?
You have a portfolio that is 33 percent invested in Stock R, 17 percent invested in Stock S, with the remainder in Stock T. The expected return on these stocks is 9.4 percent, 10.8 percent, and 13.1 percent, respectively. What is the expected return on the portfolio? Multiple Choice 11.10% 11.29% 11.49% 12.05% 10.18%
An investor has a 2-stock portfolio with $25,000 invested in Stock X and $50,000 invested in Stock Y. X's beta is 1.50 and Y s beta is 0.60. What is the beta of the investor's portfolio?
Assume a two-stock portfolio with $50,000 invested in Stock A and $30,000 invested in Stock B. The expected return of Stock A is 12% and the expected return of Stock B is -2%. What's the expected portfolio return? Group of answer choices 7.50% 6.75% 10.0% 6.0%
Your portfolio consists of two stocks: 95 shares of Stock A that sell for $47 per share and 120 shares of Stock B that sell for $25 per share. Required: (a) What is the portfolio weight of Stock A? (Click to select) (b) What is the portfolio weight of Stock B? (Click to select) V
Donald Gilmore has $100,000 invested in a 2-stock portfolio. $70,000 is invested in Stock X and the remainder is invested in Stock Y. X's beta is 1.50 and Y's beta is 0.70. What is the portfolio's beta? Select the correct answer. a. 1.31 b. 1.36 c. 1.41 d. 1.46 e. 1.26
What is the standard deviation of a portfolio formed of shares A and B? Asset (A) E(R₂) = 9% SDA = 4% W₁ = 0.4 Select one: A. 4.99% B. 4.56% C. 3.68% D. 5.16 Asset (B) E(R₂) = 11% SDB = 6% WB = 0.6 COVA, B = 0.0011
Assume your portfolio consists of 50% of a stock with a beta of 1.436 and 50% of a stock with a beta of 0.532, what is the beta of your portfolio? (Hint: Weighted average)
Compute the portfolio risk if stock A and Stock B are combined in a portfolio in the ratio 6:4 respectively.

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