Consider two risky assets that have returns variances of 0.0625 and 0.0324, respectively. The assets' standard deviations of returns are then 25% and 1 8%, respectively. Calculate the variances and standard deviations of portfolio returns for an equal-weighted portfolio of the two assets when their correlation of returns is 1.
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Consider two risky assets that have returns variances of 0.0625 and 0.0324, respectively. The assets' standard deviations of returns are then 25% and 1 8%, respectively. Calculate the variances and standard deviations of portfolio returns for an equal-weighted portfolio of the two assets when their correlation of returns is 1.
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- Consider Microsoft Corporation (MSFT) and Meta Platforms, Inc. (META) that have returns variances of 6.25% and 3.24%, respectively. Calculate the standard deviation of portfolio returns for an equal-weighted portfolio of the two assets when their correlation of returns is 0. A. 24.71% B. 19.20% C. 15.40% D. 10.28%Compute the correlation between assets A and B if you know that the standard deviation of B is 50% of the standard deviation of A and the covarancce between the two assets is 0.5 times the variance of asset A. What is the risk (measured as the variance) of the portfolio created by investing 50% in asset A and 50% in asset B in the previous point? Assume that the variance of the asset A is 4/9.Calculate the risk (standard deviation) of a 2-asset portfolio, in which asset A has a variance of return = 0.112, asset B a variance of return = 0.045, and the convariance between the return of 2 assets is = 0.102. asset A comprises 60% ans asset B comprises 40% of the total portfolio. Give your answer 0.000.
- Asset 1 has a standard deviation of returns of 0.15 while Asset 2 has a standard deviation of returns of 0.20. The correlation coefficient between the returns of the two assets is 0.34. Which of the following is closest to the covariance of the returns of the two assets if they are combined into an equally weighted portfolio? Group of answer choices 0.0129 0.0207 0.0102 0.1440Suppose Stock A has an expected return of 18% and a variance of 0.17, while Stock B has an expected return of 11% and a variance of 0.056. The covariance between Stocks A and B is -0.075. What is the expected return and standard deviation of a portfolio with 60% in A and 40% in B?Consider the following two assets: Asset Expected return Standard deviation of returns 1 18% 30% 2 8% 10% The returns on the two assets are perfectly negatively correlated (i.e. coefficient of -1). Calculate the proportions of assets 1 and 2 that generate a portfolio with a standard deviation of zero. What is the expected return of that portfolio Calculate the expected returns and standard deviations of three other portfolios with weightingsof your choice. Present a graph of your results.
- Consider the following two assets: Asset Expected return Standard deviation of returns 1 18% 30% 2 8% 10% The returns on the two assets are perfectly negatively correlated (i.e. coefficient of -1). Calculate the proportions of assets 1 and 2 that generate a portfolio with a standard deviation of zero. What is the expected return of that portfolio?A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 24%, while stock B has a standard deviation of return of 18%. Stock A comprises 60% of the portfolio, while stock B comprises 40% of the portfolio. If the variance of return on the portfolio is .0380, the correlation coefficient between the returns on A and B is _________. ) .583 ) .225 ) .327 ) .128Expected Return and risk of Hitech Ltd. is 13% and variance 225 % square and Expected Return and risk of Sigma Ltd is 18 % and 400 % Square, the Correlation Coefficient between the two is 0.2. Find the minimum variance portfolio. Also find the return and risk of the minimum variance portfolio. Clearly show the diversification benefit ?
- Which of the following statements is correct? Select one: a. Assuming a correlation coefficient of 0 between two assets, the portfolio’s standard deviation will be lower than the weighted average of the individual assets’ standard deviation. b. Assuming a correlation coefficient of +1 between two assets, the portfolio’s standard deviation will be lower than the weighted average of the individual assets’ standard deviation. c. Assuming a correlation coefficient of +1 between two assets, the portfolio’s standard deviation will be the same as the weighted average of the individual assets’ standard deviation. d. Both A and C. Clear my choiceYou are constructing a portfolio of two assets, Asset A and Asset B. The expected returns of the assets are 12 percent and 15 percent, respectively. The standard deviations of the assets are 29 percent and 48 percent, respectively. The correlation between the two assets is .25 and the risk-free rate is 5 percent. What is the optimal Sharpe ratio in a portfolio of the two assets? What is the smallest expected loss for this portfolio over the coming year with a probability of 2.5 percent?Asset X has an expected return of 6% and a variance of 0.001. Asset Y has an expected return of 12% and the same variance asX (i.e., 0.001). The returns of assets X and are uncorrelated, and the risk-free rate is 3%. Find the variance of the highestSharpe ratio portfolio that can be formed of the two risky assets X and Y.