(Answered) Questionsuppose there are 3 stocks with the same expected

Finance

Question:

Suppose there are 3 stocks with the same expected return of 10% per year and the same risk (standard deviation) of 50%. The correlation between any 2 of them is 0.5.

1) What is the risk of equal-weighted portfolio of 3 stocks? (i.e. w1 = w2 = w3 = 1 3 2)

2) Do you see any diversification effect in a?

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91957982
Price:- $10

Verified Expert

Priced at $20 Now at $10, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Basic Finance

You have been made treasurer for a day atnbspaimco inc

You have been made treasurer for a day at? AIMCO, Inc. AIMCO develops technology for video conferencing. A manager of the satellite division has asked you to authorize a capital expenditure in the amount of? $100,000. Th ...

What factors would influence the decision to sell a

What factors would influence the decision to sell a component of the business to raise capital to facilitate growth of another component of the business?

How much money would you need to deposit today at 2600

How much money would you need to deposit today at 26.00% annual interest compounded monthly to have $48,866 in the account after 7 years? If you deposit $806 into an account paying 23.00% annual interest compounded quart ...

Question - four days ago you entered into a futures

Question - Four days ago you entered into a futures contract to buy €125,000 at $1.10 per euro. The spot exchange rate when you entered the contract was $1.07. Your initial performance bond was $5,800 and your maintenanc ...

Your firm is contemplating the purchase of a new 585000

Your firm is contemplating the purchase of a new $585,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $95,000 at the end of that time. ...

Bob katz would like to save 300000 over the next 20 years

Bob Katz would like to save $300,000 over the next 20 years. If Bob knows today that he will be given $100,000 in 15 years as part of an inheritance, how much would Bob still need to save annually over the next 20 years ...

Can anyone explain this topic consolidation can hide

Can anyone explain this topic 'Consolidation can hide imminent business collapse'. If you can share your argument with real examples that will be much appreciated.

What is the comparison and contrast between ethical

What is the comparison and contrast between ethical leadership and unethical leadership qualities in an ethnically diverse and multicultural workplace in terms of project management. What is an example of each qualities?

Corporate fund started the year with a net asset value of

Corporate Fund started the year with a net asset value of $15.90. By year-end, its NAV equaled $13.80. The fund paid year-end distributions of income and capital gains of $3.30. What was the rate of return to an investor ...

How has project management evolved from 1945 until now

How has project management evolved from 1945 until now. Provide one example of a major change in project management that occurred during this time period. Why is it significance. 200 wds. Why are time, cost, and scope re ...

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 Basic Finance Expert