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28 Sep 2019
1) You wish to invest in a portfolio of stocks A (50%) and B (50%). The risk free rate is 4%.
A B
Expected return (%) 10 20
Beta 1.2 1.8
Correlation coefficient between returns 0.3
Whatâs the portfolio return?
a)24%
b) 30%
c)11%
d) 15%
2) Whatâs the portfolio beta in Question 1?
a) 3
b) 1.5
c) 1.2
d) 1.8
1) You wish to invest in a portfolio of stocks A (50%) and B (50%). The risk free rate is 4%.
A B
Expected return (%) 10 20
Beta 1.2 1.8
Correlation coefficient between returns 0.3
Whatâs the portfolio return?
a)24% |
b) | 30% |
c)11% |
d) 15% |
2) Whatâs the portfolio beta in Question 1?
a) | 3 |
b) | 1.5 |
c) | 1.2 |
d) 1.8 |
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Nelly StrackeLv2
28 Sep 2019
Related questions
1. You wish to invest in a portfolio of stocks A (50%) and B (50%). The risk free rate is 4%.
A B
Expected return (%) 10 20
Beta 1.2 1.8
Correlation coefficient between returns 0.3
Whatâs the portfolio return? (In percent without % sign, E.g. 33)
2. Whatâs the portfolio beta in Question 1?
3. The risk reduction through diversification in a portfolio of two stocks
a. | decreases as the correlation between the stocks rises. |
b. | (Not enough information.) |
c. increases as the correlation between the stocks declines. |
d. (Both statements are correct.) |