Hyacinth Macaw invests 68% of her funds in stock I and the balance in stock J. The standard deviation of returns on I is 13%, and on J it is 20%. (Use decimals, not percents, in your calculations.) Calculate the variance of portfolio returns, assuming the correlation between the returns is 1. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Calculate the variance of portfolio returns, assuming the correlation is 0.5. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Calculate the variance of portfolio returns, assuming the correlation is 0. (Do not round intermediate calculations. Round your answer to 4 decimal places.)

Hyacinth Macaw invests 68% of her funds in stock I and the balance in stock J. The standard deviation of returns on I is 13%, and on J it is 20%. (Use decimals, not percents, in your calculations.) Calculate the variance of portfolio returns, assuming the correlation between the returns is 1. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Calculate the variance of portfolio returns, assuming the correlation is 0.5. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Calculate the variance of portfolio returns, assuming the correlation is 0. (Do not round intermediate calculations. Round your answer to 4 decimal places.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 5P

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