All categories

3 years ago

The standard deviation of a portfolio consisting of 30% of Stock X and 70% of Stock Y is:

Business

1 answer:

andrew-mc [135]3 years ago

5 0

Answer:

The portfolio SD is A. 20.65%

Explanation:

The standard deviation tells the total risk (both systematic and unsystematic) associated with a stock or a portfolio. The portfolio risk or the standard deviation of portfolio can be calculated using the following formula as attached in the picture below.

Using this formula, the standard deviation of the portfolio is:

SDp = √(0.3)² * (0.2)² + (0.7)² * (0.25)² + 2 * (0.3)*(0.7) * 0.4 * (0.2)*(0.25)

Portfolio SD = 0.20645 or 20.645% rounded off to 20.65%

You might be interested in

Help ASAP Plz i have 3mins left thx!!!

Viefleur [7K]

1. A) Because you don't want to be stuck living with your parents until you are 30

2. B) Living and educational expenses

Reason:

I took a test very similar to this a few days ago, and I am a straight-A student.

4 0

3 years ago

Read 2 more answers

Conducting research about an occupation, company, or job can increase your employability. Please select the best answer from the

UkoKoshka [18]

Your answer will be true! good luck

7 0

4 years ago

Read 2 more answers

Reading out loud is an effective strategy for proofreading a written work. Please select the best answer from the choices provid

tatyana61 [14]

Answer:

the answer would be true! :)

Explanation:

8 0

3 years ago

In which sequence will events occur when the economy adjusts to an expansionary monetary policy, in the short run and then in th

Kitty [74]

Answer:

1. The Fed uses open market operations to increase the money supply, thus lowering interest rates and stimulating investment.

Expansionary monetary policy is done to stimulate economy by increasing money supply. It lowers interest rates and leaves more money for consumption and investment.

2. Increased aggregate demand leads to some higher prices and more total output.

Increased AG will lead to prices being higher in response. This would spur producers to produce more thereby increasing output.

3. Sticky input prices adjust to inflation.

Input prices will rise overtime to match the increase in prices.

4. Producers lay off some workers in response to higher input prices, causing a decrease in aggregate supply.

When the inputs rise, production becomes more expensive so producers will have to lay off workers to maintain profitability. They will also supply less goods as a result.

5. In the long run, equilibrium returns to the same initial production level.

In the long run therefore, the reduction in AS leads to production returning to pre-monetary policy figures.

6 0

3 years ago

Sommer, Inc., is considering a project that will result in initial aftertax cash savings of $1.79 million at the end of the firs

iren [92.7K]

Answer:

Maximum initial cost would be $58,116,883.12

Explanation:

1,790,000 increased at 3%

$WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})$

Ke 0.119 + 0.02 = 0.139

ER 0.15

Kd(after-tax) Kd(1-t) = 0.047

DR 0.85

$WACC = 0.139(0.15) + 0.047(.85)$

WACC 0.06080

Now that we have the rate, we calculate the present value using the gordon method

1,790,000 / (0.06080-0.03) = 58,116,883.12

4 0

3 years ago