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Svetllana [295]
3 years ago
9

Stock A ‘s returns have a standard deviation of 0.5, and stock B’s returns have standard deviation of 0.6.The correlation coeffi

cient between A and B equals 0.5. What is the variance of a portfolio composed of 70 percent Stock A and 30 percent Stock B?
Mathematics
1 answer:
galben [10]3 years ago
4 0

Answer:

The variance of the profile is 0.2179.

Step-by-step explanation:

We are given the following in the question:

\sigma_A = 0.5\\\sigma_B = 0.6\\\rho_{A,B} = 0.5\\w_A = 70\% = 0.7\\w_B = 30\% = 0.3

Variance of portfolio is given by:

w_A^2\sigma_A^2 +w_B^2\sigma_B^2 + 2w_Aw_BCov_{A,B}

Cov_{A,B} = \rho_{A,B} \times \sigma_A \times \sigma_B \\=0.5\times 0.5 \times 0.6\\=0.15

Putting values, we get,

w_A^2\sigma_A^2 +w_B^2\sigma_B^2 + 2w_Aw_BCov_{A,B}\\=(0.7)^2(0.5)^2 + (.3)^2(0.6)^2 + 2(0.7)(0.3)(0.15)\\=0.2179

Thus, the variance of the profile is 0.2179.

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Consider the following polynomial. - 2x * y ^ 5 + 3x ^ 7 - 10x ^ 3 * y ^ 6 + 8x ^ 6 + 4 Which of the following statements are tr
Salsk061 [2.6K]

Option a: polynomial has 5 terms.

Option c: The constant term is 4.

Explanation:

The polynomial is -2xy^{5} +3x^{7} -10x^{3} y^{6} +8x^{6} +4

Option a: Polynomial has 5 terms

From the polynomial, we have,

1st term = -2 x y^{5}

2nd term = 3 x^{7}

3rd term = -10 x^{3} y^{6}

4th term = 8 x^{6}

5th term = 4

Hence, the polynomial has 5 terms.

Thus, Option a is the correct answer.

Option b: The leading coefficient is -2 and the degree of the polynomial is 7.

The leading coefficient is the coefficient of the variable with the largest degree.

The degree of the polynomial can be determine by the adding the powers of the variable.

degree of 1st term = -2 x y^{5} = 1+5=6

degree of 2nd term = 3 x^{7} =7

degree of 3rd term = -10 x^{3} y^{6} =3+6=9

degree of 4th term = 8 x^{6} =6

degree of 5th term = 4 =0

Thus, from these 5 terms the highest value is 9 which is the degree of the polynomial.

The polynomial -2xy^{5} +3x^{7} -10x^{3} y^{6} +8x^{6} +4 has a largest degree of 9 and the leading coefficient is -10.

Hence, Option b is not the correct answer.

Option c: The constant term is 4.

The constant term is a term in which variable will not occur.

From the polynomial -2xy^{5} +3x^{7} -10x^{3} y^{6} +8x^{6} +4, we can see that the constant term is 4.

Hence, Option c is the correct answer.

Option d: Polynomial is in decreasing degree order

The decreasing degree order is the degree in which each term is no larger than the degree of the preceding term.

From the polynomial, we have,

degree of 1st term = -2 x y^{5} = 1+5=6

degree of 2nd term = 3 x^{7} =7

degree of 3rd term = -10 x^{3} y^{6} =3+6=9

degree of 4th term = 8 x^{6} =6

degree of 5th term = 4 =0

where the degree of the 3rd term is not less than the 4th term.

Thus, the polynomial is not in decreasing degree order.

Hence, Option d is not the correct answer.

5 0
3 years ago
Two rational expressions have denominators of 2x + 3 and 3 + 2x. Can you find their sum by simply adding their numerators and pl
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Okay i haven't done this years but base on my knowledge it think that the answer is 6 and that because:
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X is 0 so that means you answer would be 3+0=3
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What is the equation, in slope-intercept form, of the line that passes through (0,6) and has a slope of 4?
yKpoI14uk [10]

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3 years ago
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