answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Gnesinka [82]
2 years ago
4

Stocks A and B each have an expected return of 12%, a beta of 1.2, and a standard deviation of 25%. The returns on the two stock

s have a correlation of +0.6. Portfolio P has 50% in Stock A and 50% in Stock B.
Which of the following statements is correct?
a. Portfolio P has a beta that is greater than 1.2.
b. Portfolio P has a standard deviation that is greater than 25%.
c. Portfolio P has an expected return that is less than 12%.
d. Portfolio P has a standard deviation that is less than 25%.
e. Portfolio P has a beta that is less than 1.2.
Business
1 answer:
Iteru [2.4K]2 years ago
8 0

Answer: d. Portfolio P has a standard deviation that is less than 25%

Explanation:

This answer is correct because whenever 2 stocks have a correlation of less than 1 , a portfolio consisting of these 2 stocks will always have a standard deviation less than the standard deviation of the stocks standard deviation added according to their weight in the portfolio, so in this case both stocks have a weight of 50% and standard deviation of 25% so their sum will be

(0.5*25%) +( 0.5*25%)= 25%, so the portfolio standard deviation will be less than 25%.

You might be interested in
A new machine costs $200,000 and has a useful life of 5 years, with a salvage value of $30,000. It will cost $5,000 to dismantle
aleksley [76]

Answer:

The book value at the end of year 3 is $100,000

Explanation:

Yearly Depreciation =(cost+cost of dismantling-salvage value)/useful life

cost is $200,000

cost of dismantling is $5000

salvage value is $30000

useful life is 5 years

Yearly depreciation=(200000+5000-30000)/5

Yearly depreciation=$35000

Depreciation for three years=$35000*3

                                               =$105000

Book value at the end of year 3=total cost of machine-three years' depreciation

Book value at end of year 3=$200000+$5000-$105000

Book value at the end of year 3=$100,000

7 0
2 years ago
General Mills collects data on​ sales, customer​ information, preferences, and a host of other information related to the​ Go-gu
kvv77 [185]

General Mills is most likely using marketing information system in collecting and storing data. A market information system is being used in order to support the decision making of the market in which the data is composed of stored, analyzed and gathered data in which is being distributed to the managers.

4 0
2 years ago
Read 2 more answers
Which statement below best captures the overall point and focus of the New York Times article, Document 3?
Artemon [7]

Answer:

Correct Answer:

C) The news story marks the historical event of the first black man being called up to play in the major leagues and expresses some concern over how Robinson will be treated by his major league peers.

Explanation:

<em>Option C ıs the best statement which captures the overall point and focus of the given New York Times article, Document 3.</em>

6 0
2 years ago
Consider two perfectly negatively correlated risky securities, K and L. K has an expected rate of return of 13% and a standard d
mihalych1998 [28]

Answer:

risk free rate of return is  = 11.37 %

Explanation:

given data

K expected rate of return = 13%

K standard deviation = 19%  = 0.19

L expected rate of return = 10%

L standard deviation = 16% = 0.16

to find out

risk-free portfolio rate of return

solution

first we find here weight of each portfolio

weight of K = \frac{L standard deviation}{K standard deviation+ L standard deviation}      ..................1

weight of K = \frac{0.16}{0.19+0.16}

weight of K = 0.4571 = 45.71%

and

weight of L = 1 - 0.4571

weight of L = 0.5428 = 54.28 %

so that

risk free rate will be here

risk free rate = ( weight of K × K expected rate of return  ) + ( weight of L + L expected rate of return  )    ..........................2

risk free rate = ( 45.71 % × 13 % ) + ( 54.28 % + 10% )

risk free rate = 11.37 %

4 0
2 years ago
You are exploring a career in nursing in the state of MA. The average hourly wage for a RN is $33.37. You are planning to work 4
yawa3891 [41]

Answer:$1,735.24

half is 1.5

40 regular hours * $33.37 = $1334.8

8 overtime hours * (1.5 * $33.37) = $400.44

$1334.8 + $400.44 = $1735.24

6 0
2 years ago
Other questions:
  • An example of a company known for responding appropriately to an ethical dilemma is __________.
    6·1 answer
  • Julian wants to grow carrots and corn. He purchases a farm in a town called Daisyville. Daisyville is well connected to the near
    15·1 answer
  • Suppose you have $10,000 in cash to invest. You decide to sell short $5000 worth of Kinston stock and invest the proceeds from y
    7·1 answer
  • On the demand side of GDP, consumption by _____________ is the largest component of GDP, accounting for about two-thirds of the
    5·1 answer
  • A company issued $50,000 of 8%, 10-year bonds on January 1. The bonds pay semi annual interest. The present value factor of a si
    11·1 answer
  • What do you feel would be a minimally acceptable rate of pay? (ex. $X.XX or $XX,XXX):_______.
    5·1 answer
  • Which of the following statements is not correct regarding restitution?
    12·1 answer
  • What are the salient characteristics attributes lifestyle skill and traits that have made you successful in this business?
    11·1 answer
  • Peter held a sales associate's license. He renewed his license by completing the post-licensure class on time, but he filled out
    11·1 answer
  • Suppose Cardullo’s gift cards expire after one year. A customer had a gift card for $100, of which he used $75 to purchase gourm
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!