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1. Here are some historical data on the risk characteristics of Ford and Harley Davidson. Ford Harley Davidson 0.87 eta nnual Standard Deviation of return (%) 32.4 16.2 The correlation coefficient of Ford's return versus Harley Davidson is 0.41. What is the standard deviation of a portfolio invested half in each share ) What is the standard deviation of a portfolio invested one-third in Ford, one-third in Harley Davidson, and one-third in risk-free Treasury bills?(Hint eat the whole portfolio as a portfolio in part a) plus risk-free assets. You need to figure out the new weights.) 1.36

1. Here are some historical data on the risk characteristics of Ford and Harley Davidson. Ford Harley Davidson 0.87 eta nnual Standard Deviation of return (%) 32.4 16.2 The correlation coefficient of Ford's return versus Harley Davidson is 0.41. What is the standard deviation of a portfolio invested half in each share ) What is the standard deviation of a portfolio invested one-third in Ford, one-third in Harley Davidson, and one-third in risk-free Treasury bills?(Hint eat the whole portfolio as a portfolio in part a) plus risk-free assets. You need to figure out the new weights.) 1.36

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 3P
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11. Here are some historical data on the risk characteristics of Ford and Harley Davidson. Ford Harley Davidson 0.87 Beta Annual Standard Deviation of return (%) 32.4 16.2 a) The correlation coefficient of Ford's return versus Harley Davidson is 0.41. What is the standard deviation of a portfolio invested half in each share? b) What is the standard deviation of a portfolio invested one-third in Ford, one-third in Harley Davidson, and one-third in risk-free Treasury bills?(Hint: treat the whole portfolio as a portfolio in part a) plus risk-free assets. You need to figure out the new weights.) 1.36
Transcribed Image Text:11. Here are some historical data on the risk characteristics of Ford and Harley Davidson. Ford Harley Davidson 0.87 Beta Annual Standard Deviation of return (%) 32.4 16.2 a) The correlation coefficient of Ford's return versus Harley Davidson is 0.41. What is the standard deviation of a portfolio invested half in each share? b) What is the standard deviation of a portfolio invested one-third in Ford, one-third in Harley Davidson, and one-third in risk-free Treasury bills?(Hint: treat the whole portfolio as a portfolio in part a) plus risk-free assets. You need to figure out the new weights.) 1.36
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