Hyacinth Macaw invests 60% of her funds in stock I and the balanced stock in J. The standard deviation of returns on I is 10% and on J it is 20%. Calculate the variance and standard deviation of portfolio returns, assuming: The correlation between the returns is 1.0 (make sure you state the formula)
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Hyacinth Macaw invests 60% of her funds in stock I and the balanced stock in J. The standard deviation of returns on I is 10% and on J it is 20%. Calculate the variance and standard deviation of portfolio returns, assuming: The correlation between the returns is 1.0 (make sure you state the formula)
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- Hyacinth Macaw invests 46% of her funds in stock I and the balance in stock J. The standard deviation of returns on I is 10%, and on J it is 30%. (Use decimals, not percents, in your calculations.) a. Calculate the variance of portfolio returns, assuming the correlation between the returns is 1. (Do not round intermediate calculations. Round your answer to 4 decimal places.) b. Calculate the variance of portfolio returns, assuming the correlation is 0.6. (Do not round intermediate calculations. Round your answer to 4 decimal places.) c. Calculate the variance of portfolio returns, assuming the correlation is 0. (Do not round intermediate calculations. Round your answer to 4 decimal places.)Hyacinth Macaw invests 68% of her funds in stock I and the balance in stock J. The standard deviation of returns on I is 13%, and on J it is 20%. (Use decimals, not percents, in your calculations.) Calculate the variance of portfolio returns, assuming the correlation between the returns is 1. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Calculate the variance of portfolio returns, assuming the correlation is 0.5. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Calculate the variance of portfolio returns, assuming the correlation is 0. (Do not round intermediate calculations. Round your answer to 4 decimal places.)Suppose that Jerry Tan has surplus funds to invest in both stocks, Alpha and Beta. He has decided to form a portfolio with investment in both stocks. The correlation coefficient between the expected return of both stocks is 0.8 and the weightage of investment is 40% for Stock Alpha and 60% for Stock Beta.Required:(i) Compute the expected return of the portfolio. (ii) Compute the variance of the portfolio. (iii) Compute the standard deviation of the portfolio.
- c) Stock 1 has a standard deviation of return of 1%. Stock 2 has a standard deviation of return of 8%. The correlation coefficient between the two stocks is 0.5. If you invest 60% of your funds in stock 1 and 40% in stock 2, what is the standard deviation of your portfolio? Please provide the details of your calculations and discuss your results.You are a portfolio manager at PT. Sukses Selalu Sekuritas. You manage a portfolio of 5 stocks: A, B, C, D, and E. The following table provides the stocks return for the last 5 years: Calculate the Expected Return and Standard Deviation of each stock. Without any inclusion of risk-free assets in the formation of the portfolios, what is the assets proportion of the minimum variance and maximum return portfolios? Calculate the expected return and standard deviation for both portfolios. Suppose there is a risk-free asset with a 5% return and a condition in which short sales are allowed, whilst both the borrowing and lending can be obtained at a risk- free rate. What would be the new portion of each asset, including risk-free assets for the maximum return portfolio? Calculate the portfolio’s expected return and its standard deviation.Suppose we form a portfolio invested in Mercedes and BMW stocks. The two stocks are equally weighted in the portfolio. The table below displays each stock’s mean return, variance, and standard deviation, as well as their covariance. Estimate the mean and variance of this portfolio, as well as its standard deviation. Show in detail your Asset returns Mercedes BMW Mean return 1.78% -0.48% Variance 0.0456 0.0276 Standard deviation 21.35% 16.61% Covariance 0.0020
- An investor owns a portfolio consisting of two mutual funds, A and B, with 35% invested in A. The following table lists the inputs for these funds. Measures Expected value Variance Covariance Fund A Fund B 19 91 13 37 26 a. Calculate the expected value for the portfolio return. (Round your answer to 2 decimal places.) Expected value 15.10 b. Calculate the standard deviation for the portfolio return. (Round intermediate calculations to at least 4 decimal places. Round your final answer to 2 decimal places.) Standard deviationYour employer has asked you to investigate the firm’s portfolio risk and return. The portfolio comprises three stocks. It is invested 50 percent in stock A, 30 percent in stock B and 20 percent in stock C. (a) Determine what is the portfolio’s expected return. (b) Determine the portfolio’s variance and standard deviation. (c) Assume that the expected risk-free rate is 2.75 percent. Determine the expected risk premium on the portfolio.Assume that the covariance between Stock A and Stock B is -28%^2 (0.0028). Compute the expected rate of return and variance of rate of return of Donald’s portfolio.
- An investiment portfolio consists of two securities, X and Y. The weight of X is 30%. Asset X's expected return is 15% and the standard deviation is 28%. Asset Y's expected return is 23% and the standard deviation is 33%. Assume the correlation coefficient between X and Y is 0.37. A. Calcualte the expected return of the portfolio. B. Calculate the standard deviation of the portfolio return. C. Suppose now the investor decides to add some risk free assets into this portfolio. The new weights of X, Y and risk free assets are 0.21, 0.49 and 0.30. What is the standard deviation of the new portfolio?(b) Assume that the covariance between Stock X and Stock Y is -0.005. Calculate the expected rate of return, variance and standard deviation of Jenny’s portfolio. {Hint: you can express your answers for the variance and standard deviation in decimals or percentage form:• For decimals, the covariance in your equation should be -0.005• For percentage, the covariance in your equation should be -50%2(= -50/10000)]Your employer has asked you to investigate the firm’s portfolio risk and return. The portfolio comprises three stocks. It is invested 50 percent in stock A, 30 percent in stock B and 20 percent in stock C. You gathered the following information: a) Determine what is the portfolio’s expected return b) Determine the portfolio’s variance and standard deviation c) Assume that the expected risk-free rate is 2.75 percent. Determine the expected risk premium on the portfolio.