You are allocating your wealth between two shares, GoldenClaw and Syldavian Industries. GoldenClaw has volatility 40.00%, while Syldavian Insustries has volatility 23.30%. The correlation beteween the two shares' returns is -0.13. What percentage of your wealth should you allocate to GoldenClaw to minimise your portfolio's volatility?
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You are allocating your wealth between two shares, GoldenClaw and Syldavian Industries. GoldenClaw has volatility 40.00%, while Syldavian Insustries has volatility 23.30%. The correlation beteween the two shares' returns is -0.13. What percentage of your wealth should you allocate to GoldenClaw to minimise your portfolio's volatility?
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- You are allocating your wealth between two shares, GoldenClaw and Syldavian Industries. GoldenClaw has volatility 58.20%, while Syldavian Insustries has volatility 41.60%. The correlation beteween the two shares' returns is 0.56. What percentage of your wealth should you allocate to GoldenClaw to minimise your portfolio's volatility?You are allocating your wealth between two shares, Tinkle.com and Circumbendibus Wheels. Tinkle.com has volatility 35.10%, while Circumbendibus Wheels has volatility 58.30%. The correlation beteween the two shares' returns is 0.40. What percentage of your wealth should you allocate to Tinkle.com to minimise your portfolio's volatility?What is the beta of a portfolio consisting of one share of each of the following stocks, given their respective prices and beta coefficients? Stock Pricd Beta A $10 1.4 B $24 0.8 C $41 1.3 D $19 1.8 How would the portfolio beta differ if (a) the invesstor purchased 200 shares of stocks B and C for every 100 shares of A and D and (b) equal dollar amounts were invested in each stock?
- you have invested in two shares, Tinkle.com and Circumbendibus Wheels. Tinkle.com has volatility 38.20%, while Circumbendibus Wheels has volatility 35.90%. The correlation between the two shares' returns is 0.44. You have allocated 50.00% of your money to Tinkle.com. What is the volatility of your portfolio?Suppose General Motors stock has an expected return of 19% and a volatility of 40%, and Molson-Coors Brewing has an expected return of 11% and a volatility of 30%. If the two stocks are uncorrelated, a. What is the expected return and volatility of a portfolio consisting of 72% General Motors stock and 28% of Molson-Coors Brewing stock? b. Given your answer to (a), is investing all of your money in Molson-Coors stock an efficient portfolio of these two stocks? c. Is investing all of your money in General Motors an efficient portfolio of these two stocks?You are examining three different shares. Share A has expected return 6.20%, beta 0.47, and volatility 12.00%. Share B has expected return 4.90%, beta 0.19, and volatility 20.00%. Finally, share C has expected return 9.60%, beta 0.84, and volatility 30.00%. The risk free rate is 2.90%, while the market price of risk is 8.50%. According to the CAPM, which share is undervalued?
- Your portfolio consists of115 shares of CSH and 75 shares of EJH, which you just bought at $22and $28 per share, respectively. a. What fraction of your portfolio is invested in CSH? In EJH? b. If CSH increases to$24 and EJH decreases to $24,what is the return on your portfolio?You have recently received $400,000 and you are considering investing $250,000 in the WIG and the remainder in TJH. Your analysis of each stock revealed the following information. The Expected Returns of both companies are 8% and 6% respectively and the Standard Deviations are 7% and 9% respectively. The correlation between the companies is 0.5. i. Compute the expected return of the portfolio ii. Compute the standard deviation of the portfolio iii. Given the results and any other computations, you deem relevant fromthe information presented, explain whether a rational risk-averse investor would prefer to invest in the suggested portfolio or 100% in WIG or 100% in TJHOn the basis of the two stocks' expected and required returns, which stock would be more attractive to a diversified investor? _______________ Calculate the required return of a portfolio that has $6,000 invested in Stock X and $5,000 invested in Stock Y. Do not round intermediate calculations. Round your answer to two decimal places. rp = __________% If the market risk premium increased to 6%, which of the two stocks would have the larger increase in its required return?
- You currently hold a portfolio of three stocks, Delta, Gamma, and Omega. Delta has a volatility of 36%, Gamma has a volatility of 55%, and Omega has a volatility of 52%. Suppose you invest 70% of your money in Delta, and 15% each in Gamma and Omega. a. What is the highest possible volatility of your portfolio? b. If your portfolio has the volatility in (a), what can you conclude about the correlation between Delta and Omega? ..For the above shares if the expected inter correlations are given as follows: Investment in RM millions Weight Correlation Petronas 23 ? 0.15(P,M) Maxis 47 ? 0.25(M,B) Berjaya 40 ? 0.35(B,P) d) Compute Weights e) Compute the expected portfolio return and f) Expected portfolio risk g) Portfolio Sharpe ratioYou have OMR 5,000 to invest in shares of A or B the expected returns and standard deviations of which are as follows. expected return standard deviation A 17 6 B 25 10 Required:a. Calculate expected return and standard deviation from a portfolio consisting of 50 per cent of A and 50 per cent of B assuming shares in A and B are perfectly negatively correlated. b. What is meant by coefficient of variation? Calculate coefficient of variation for shares in A and B and decide which of the two shares you would prefer to investment in and why?
