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Sladkaya [172]
3 years ago
14

Consider two stocks X and Y with the following expected returns (in percent) and standard deviations. How much of your $10,000 t

otal investment should you invest in stock Y if you would like a portfolio with zero risk and the correlation between the two stocks is -1 (perfectly negatively correlated)?
Stock Expected return Standard deviation

X 10 75
Y 20 50
Business
1 answer:
charle [14.2K]3 years ago
8 0

X $4000

Y $6000

Explanation:

Let w be invested in Stock X,

Correlation = -1

Standard Deviation = w(0.75) - (10,000 - w)(0.50)

So,

For standard Deviation to be 0,

0 = 0.75w - 5,000 + 0.50w

w = $4,000

Amount invested in Stock X = $4,000

Amount invested in Stock Y = $6,000

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Eduardwww [97]

Answer:

Find answers below.

Explanation:

Risk management can be defined as the process of identifying, evaluating, analyzing and controlling potential threats or risks present in a business as an obstacle to its capital, revenues and profits. This ultimately implies that, risk management involves prioritizing course of action or potential threats in order to mitigate the risk that are likely to arise from such business decisions.

Price risk is the risk of a decline in a bond's value due to an increase in interest rates. This risk is higher on bonds that have long maturities than on bonds that will mature in the near future.

Reinvestment risk is the risk that a decline in interest rates will lead to a decline in income from a bond portfolio. This risk is obviously high on callable bonds. It is also high on short-term bonds because the shorter the bond's maturity, the fewer the years before the relatively high old-coupon bonds will be replaced with new low-coupon issues. Which type of risk is more relevant to an investor depends on the investor's investment horizon, which is the period of time an investor plans to hold a particular investment. Longer maturity bonds have high price risk but low reinvestment risk, while higher coupon bonds have a higher level of reinvestment risk and a lower level of price risk. To account for the effects related to both a bond's maturity and coupon, many analysts focus on a measure called duration, which is the weighted average of the time it takes to receive each of the bond's cash flows.

The bonds which would have the largest duration is a 10 year - zero coupon bond.

3 0
3 years ago
Cedric, a brand manager, transferred from the united States to japan He dscovered that athough people in the Unted States highly
Firdavs [7]

Answer: collectivism

Complete Question:

Cedric, a brand manager, transferred from the united States to japan He discovered that although people in the United States highly valued individualism, people in Japan expect individuals to conform to group expectations. Cedric concluded that Japan places more of an emphasis on:

Explanation: Collectivism values the group over individuals belonging to the group. In cultures where collectivism is the norm, individuals tend to want to conform to the group expectations. Also, it is common for individuals in collectivist societies to define themselves as belonging to a group than as individuals so groups are a way of identifying themselves.  

While individualism values individuals's right and uniqueness, collectivism does not  but sees value in maintaining the cohesion in a group, which in turn promotes conformity.

6 0
4 years ago
Common stock holders: Group of answer choices have one vote in the election of how the company operates. are last in line to rec
enot [183]

Answer:

are last in line to receive income.

Explanation:

Common stock holders are referred to as the owners of the company. They own shares that gives them the right to vote in a company's general meeting, receive dividends, and they have the right to get newly issued shares in the company before others.

However they are also called unsecured creditors of the company because when the business makes income they are the last in line to receive dividends if any remains.

Also in the case of bankruptcy preference share holders and other creditors are paid first. Common share holders are paid last.

5 0
3 years ago
A politician is interested in implementing a statewide welfare reform program. By providing welfare recipients with extensive jo
Allisa [31]

Answer: (D) Efficiency

Explanation:

The evaluation of the efficiency is the process in which we concerned about the efficiency of system so that it produced the desirable result.

We can also evaluate the efficiency by using the ratio of the output of the system to the input in the form of quantitative and the qualitative.

According to the question, the researcher work is basically refers evaluation of the efficiency as the implementation of the welfare program and the researcher argues are basically based on the efficiency evaluation.

Therefore, Option (D) is correct.

8 0
3 years ago
in a well-diversified investment portfolio, the allocation of real estate investments should not exceed five percent.a. Trueb. F
Dmitry_Shevchenko [17]

"In a well-diversified investment portfolio, the allocation of real estate investments should not exceed five percent" is false.

<h3>What is real estate?</h3>

⇒ Real estate is immovable property of this type that consists of land and the buildings on it, as well as its natural resources, such as crops, minerals, or water; an interest in this (also) constitutes real property, or (more broadly) buildings or houses in general. In legal terminology, real refers to real property, which is distinct from personal property, and estate refers to a person's "interest" in that real property.

Real estate is distinct from personal property, which includes things like cars, yachts, jewels, furniture, equipment, and a farm's rolling stock but is not affixed to the land permanently.

To learn more about real estate, visit:

brainly.com/question/1534216

#SPJ4

4 0
1 year ago
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