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Bogdan [553]
4 years ago
10

portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 18%, while stock B has a standard de

viation of return of 24%. Stock A comprises 60% of the portfolio, while stock B comprises 40% of the portfolio. If the variance of return on the portfolio is 0.033, the correlation coefficient between the returns on A and B is _________.
Business
1 answer:
Goryan [66]4 years ago
5 0

Answer:

- 0.5844

Explanation:

Portfolio Variance can be calculated using the following formula:

σP2 = wA2 * σA2    +    wB2 * σB2    +   2* wA * wB * σA * σB * ρAB

Here

wA  is the percentage of stock A of the total portfolio which is 60%

σA is the standard deviation of Stock A which is 18%

wB is the percentage of stock A of the total portfolio which is 40%

σB is the standard deviation of Stock B which is 24%

σBσP is the variance return on the portfolio which is 0.033

And

ρAB is correlation coefficient between the returns on A and B which is to be calculated.

By putting values, we have:

0.033 = 60%^2 * 18%^2   +  40%^2  * 24%^2   +  2 * 60% * 40% * 18% * 24% * ρAB

ρAB = - 0.5844

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->>>5.35%

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3 years ago
during the 1980's, the price of one share of Johnson and Johnson stock rose from $17 1/4 to $56 1/8. how much money would you ha
Andre45 [30]

Given:

Price of one share in 1980 = $17\dfrac14

Price of one share in 1989 = $56\dfrac18.

To find:

How much money would you have made if you bought 100 shares of Johnson & Johnson stock in 1980 and sold it in 1989?

Explanation:

Using the given information,

Change in the value of each share = 56\dfrac18-17\dfrac14

                                                          = \dfrac{448+1}{8}-\dfrac\dfrac{68+1}{4}

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                                                          = \dfrac{449-138}{8}

                                                          = \dfrac{311}{8}

Value of one share increased by $\dfrac{311}{8}.

Value of 100 shares increased by = 100\times \dfrac{311}{8}

                                                        = \dfrac{31100}{8}

                                                        = \dfrac{7775}{2}

                                                        = 3887.5

Therefore, you would have made $3887.5 if you bought 100 shares of Johnson & Johnson stock in 1980 and sold it in 1989.

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Answer:

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Although before it was easy to explain CSR as an inner organizational practice or a business ethics technique, the period followed when different international legislation were established and different organizations used their power to move beyond person and even sector-wide programs.

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