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Stocks % of Portfolio Expected Return Standard Deviation

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Stocks % of Portfolio Expected Return Standard Deviation;Artemis 20% 6% 37%;Babish & Co 30% 14% 41%;Cornwell Ind 35% 11% 44%;Danforth Motors 15% 3% 46%;What is the expected return of Andre's stock portfolio?;14.55%;7.28%;13.10%;9.70%;Suppose each stock in the above portfolio has a correlation coefficient of 0.4 with each of the other stocks.;The average standard deviation is around 20% & the weighted average of the risk of the individual securities;in the partially diversified portfolio of four stocks is 42%.;If 40 additional randomly selected stocks with a correlation coefficient of.3 with other stocks in the portfolio;were added to the portfolio, what effect would this have on the portfolio's standard deviation?;It would gradually settle at about 20%;It would gradually settle at about 50%;It would stay constant at 42%;It would decrease gradually settling at about 0%

 

Paper#34295 | Written in 18-Jul-2015

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