Consider three stocks a b and c costing 100 each the annual, Ask an Expert

Statistics

Consider three stocks A, B and C costing $100 each. The annual returns on the three stocks have mean $5 and variance $10.

a. Suppose that the returns on the three stocks are i.i.d. Find the means and variance of the returns on Portfolio I, consisting of 3 units of A, and Portfolio II, consisting of 1 units each of A, B and C?

b. Suppose the returns from A and B have a correlation coefficient of -0.8 but they are uncorrelated with returns from C. Find the means and variances of the returns on the two portfolios.

c. Suppose the returns from A, B, and C are perfectly correlated (each pair have a correlation =1). Find the means and variances of the returns on the two portfolios. Is there any benefit to diversification in this case?

View complete question

Applied Statistics, Statistics

Category:- Applied Statistics
Reference No.:- M9528124

Have any Question?Write your Review or question?

Related Questions in Applied Statistics

Quantitative methods in health statistical analysis report

Quantitative Methods in Health Statistical Analysis Report - Question 1 - Are you a Lark or an Owl? Studies indicate that about 10% of us are morning people (Larks) while 20% are evening people (Owls) and the rest are no ...

Applied statistics - regression assignmentin this

Applied Statistics - Regression Assignment In this assignment you are expected to set up a regression equation, run that regression and interpret and evaluate the results. You will need to carefully state all null hypoth ...

Assignment - research topicpurpose the purpose of this task

Assignment - Research topic Purpose: The purpose of this task is to ensure you are progressing satisfactorily with your research project, and that you have clean, useable data to analyse for your final project report. Ta ...

Business data analysis facts from figures assignment

BUSINESS DATA ANALYSIS: FACTS FROM FIGURES Assignment - Question 1 - Private capital expenditure for 12 successive quarters are presented in the following table: Quarter Millions 1 31,920 2 25,120 3 30,350 4 24,650 5 ...

A company produces labeled packaging material and the

A company produces labeled packaging material and the company intends to buy a new machine for shaping and labeling. The company has been approached by two different companies and the production manager did a test on the ...

Assessment task -you become interested in the non-skeletal

Assessment Task - You become interested in the non-skeletal effects of vitamin D and review the literature. On the basis of your reading you find that there is some evidence to suggest that vitamin D deficiency is linked ...

Exercise -q1 do the example data in table 35-2 meet the

Exercise - Q1. Do the example data in Table 35-2 meet the assumptions for the Pearson χ 2 test? Provide a rationale for your answer. Q2. Compute the χ 2 test. What is the χ 2 value? Q3. Is the χ 2 significant at α = 0.05 ...

Construct a regression model for predicting total charges

Construct a regression model for predicting total charges from length of stay for DRG 105. a. State the null and alternative hypotheses and alpha level. b. Prepare a scatter diagram with the regression line for the two v ...

Business analytics and statistics research reportthis

Business Analytics and Statistics Research Report This assignment is based on fictional data. You are creating a business report for the CEO of a retail company called, Athlete Panda. It must be professional in presentat ...

Go to the webliography source for the national cancer

Go to the Webliography source for the National Cancer Institute's Surveillance, Epidemiology, and End Results (SEER) Program. In the Fast Stats, create your own cancer statistical report, "Stratified by Data Type," and u ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Applied Statistics Expert