Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Statistics and Probability Expert

Expected returns as well as risk in portfolio.

When the CAPM holds with E (RM) =12%, σM = 20% and Rf = 2%,

(a) What must be the expected return of stock X that has a standard deviation σX = 30%, and a correlation with the market portfolio of ρXM = 0.6.

(b) Presume that stock Y has the same standard deviation as stock X i.e., σy = 30%, however the correlation with the market portfolio ρYM = 0.2. find out βY and E (RY). describe what can you learn by comparing results in (a) and (b)?

(c) A portfolio p of consisting 60% of stock X and 40% of stock Y has a correlation ρpM = 0.62 with the market. describe what is the portfolio volatility and Comment on the diversification effect!

Statistics and Probability, Statistics

  • Category:- Statistics and Probability
  • Reference No.:- M922221

Have any Question? 


Related Questions in Statistics and Probability

1 list as many sources of archival data as you can2 what

1. List as many sources of archival data as you can. 2. What four kinds of research questions are particularly suited for the use of archival data? 3. Describe how you would conduct a content analysis.

For planning purposes the landfill in mountainview

For planning purposes. the landfill in Mountainview estimates the weight of plastic to b e1.7 pounds per household each week. You have noticed a lit of plastics in the garbage in your neighborhood and want to test the cl ...

For this assignment you will continue to use data derived

For this assignment you will continue to use data derived from Capital Bikeshare trip records from 2011 and 2012, this time analysing patterns in daily numbers of rentals by casual users. References and Data Sources: Bac ...

Please no plagiarism1 compare and contrast the northern and

Please no plagiarism. 1. Compare and contrast the Northern and Southern economies and societies in the antebellum period. How did industrialization develop in the North, and plantation slavery in the South? How did the e ...

What main effects and interaction could you test with the

What main effects and interaction could you test with the design you developed for Question 1? Are you predicting that you will obtain an interaction? Question 1 Build on the design you created in Question 2 to test the ...

Question the mean weight 10 randomly selected newborn

Question: The mean weight 10 randomly selected newborn babies at a local hospital was found to be 7.14 and the standard deviation was found to be 0.87 lbs. If the weights of newborn babies is approximately normally distr ...

Suppose that a certain college class contains 42 students

Suppose that a certain college class contains 42 students. Of these, 23 are freshmen, 28 are history majors, and 8 are neither. A student is selected at random from the class. (a) What is the probability that the student ...

A simple random sample of 120 men results in a mean of 80

A simple random sample of 120 men results in a mean of 80 beats per minute, and a standard deviation of 11 beats per minute. Based on the sample results, the researcher concludes that the pulse rates of men have a standa ...

Using the table of random numbers in appendix a-1 draw a

Using the table of random numbers in Appendix A-1, draw a stratified random sample of 10 boys and 10 girls from the following population: Ed Dale Eleanor Carlos Betsy Elisha Kevin Collin Raji Chris Milou Richard Tom Ryan ...

1 explain how you would use a manipulation check to

1. Explain how you would use a manipulation check to determine whether you successfully manipulated room temperature in a study of temperature and aggression. 2. Distinguish between an independent variable and a subject ...

  • 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

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen