1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
cluponka [151]
3 years ago
5

Chris Smith owns a portfolio consisting of two stocks, Amazon and Apple, Inc. Chris owns $2,000 of Amazon and $6,500 of Apple, I

nc. Chris has computed the expected return on Amanzon to be 8.2% and the expected return on Apple, Inc. to be 9.5%. The standard deviation of the returns on Amazon is 5.07% and the standard deviation of the returns on Apple, Inc. is 6.84%. The covariance on the returns of the two companies is -0.0014.
1. What is the expected return on Chris’ portfolio?

a. 6.39 percent
b. 7.70 percent
c. 9.99 percent
d. 7.89 percent
e. 9.19 percent

2. . What is the risk of this portfolio (measured by standard deviation)?

a. 4.87 percent
b. 4.26 percent
c. 2.73 percent
d. 7.46 percent
e. 3.82 percent
Business
1 answer:
Lilit [14]3 years ago
6 0

Answer:

0.0919411

4.87%

Explanation:

Given that:

AMAZON :

Investment = $2000

Expected return = 8.2%

Standard deviation = 5.07%

APPLE :

Investment = $6500

Expected return = 9.5%

Standard deviation = 6.84%

Total investment = $(2000 + 6500) = $8500

Amazon investment weight :

2000 / 8500 = 0.2353

Apple investment weight :

6500 / 8500 = 0.7647

Expected return on portfolio:

(Amazon weight * Amazon expected return) + (apple weight * apple expected return)

= (0.2353 * 0.082) + (0.7647 * 0.095)

= 0.0919411

= 0.0919411 * 100%

= 9.19411 = 9.19%

Portfolio risk :

Sqrt[(Amazon weight ² * amazon standard deviation²) + (apple weight ² * apple standard deviation ²) + 2 (weight of Amazon * weight of apple * covariance)]

Sqrt[(0.2353^2 * 0.0507^2) + (0.7647^2 * 0.0684^2) + 2(0.2353 * 0.7647 * - 0.0014)

Sqrt(0.0023743662707145)

= 0.0487274

= 0.0487274 * 100%

= 4.87%

You might be interested in
Economic resources are the natural, human, and technological inputs used to produce goods and services. natural, technological,
IRISSAK [1]

Answer and Explanation:

A. Economic resources can be defined as the natural, human, and manufactured inputs that are used in the production of goods and services.

B. These resources are also referred to as factors of production as they fall within the factors of production such as land, labour, capital and entrepreneur. They are useful in the production process of goods and services.

C. They are called inputs. As inputs they are used in the production process and at the end of it all they bring about output for the producer.

5 0
3 years ago
Jane recently was diagnosed with stage ii skin cancer. the treatment for her particular diagnosis should last no longer than a m
never [62]

F M L A which is the Family & Medical Leave Act provides certain employees with up to 12 weeks of unpaid leave for things like birth or adoption of a child, caring for a sick relative, or undergoing cancer treatment.

7 0
3 years ago
Potential gdp in the u.s. will be unaffected by ____________________.group of answer choicestechnologythe amount of capital avai
Burka [1]

The potential GDP in the U.S. will be unaffected by the unemployment rate.

What is meant by potential GDP?

An estimation of the value of the output that the economy would have created if labor and capital had been engaged at their maximum sustainable rates—that is, rates consistent with steady growth and stable inflation—is known as potential GDP.

What is the unemployment rate?

The number of persons actively seeking work as a percentage of the labor force is used to calculate the unemployment rate in the United States. In July 2022, the US jobless rate dropped from 3.6% to 3.5%, the lowest level since February 2020, despite analysts' expectations that it would remain steady.

What causes a high unemployment rate?

Numerous factors, including those from the supply side—the worker—and the demand side—the employer—contribute to unemployment. High-interest rates, a worldwide recession, and a financial crisis could all have an impact on demand. Frictional unemployment and structural employment are major contributors on the supply side.

Learn more about potential GDP: brainly.com/question/15682765

#SPJ4

4 0
2 years ago
What should a food worker use to retrieve ice from an ice machine?​
Snezhnost [94]

Answer:

A food worker should use an ice scoop when retrieving ice from ice machine

Explanation:

The use of a scoop when retrieving ice from the ice machine helps to minimize the risk of ice being a source of food-borne disease.  More importantly, the food worker should ensure that his or her hands are clean and only hold the ice scoop by the handle.  

Both Canada and the US health guidelines, ice is classified as food. Some scientific research works have revealed that some viruses and bacteria can survive in freezing environments for a long time. Therefore, using an ice coop by a food worker ensures that ice is not contaminated.  

4 0
4 years ago
Antonio wants to select a financial institution that offers a variety of services, and he is not part of a large organization or
MariettaO [177]
A). a credit union. The bank would be a big organization and is a commercial bank, sure it offers a variety of services, but so do credit unions.
6 0
4 years ago
Read 2 more answers
Other questions:
  • Technical tool that provides users with the ability to study, control, and
    8·1 answer
  • Demand deposits include ________ accounts. select one:
    10·1 answer
  • Many companies sell different types of cell phones. Some consumers prefer to use a specific brand because of its different kind
    7·2 answers
  • Self-employed individuals may claim, as a deduction for adjusted gross income, 50 percent of theirA) traditional IRA contributio
    11·1 answer
  • In expectancy theory, valence is
    13·1 answer
  • Romo Enterprises needs someone to supply it with 127,000 cartons of machine screws per year to support its manufacturing needs o
    8·1 answer
  • What account is credited when overhead cost is applied to work in process? would you expect the amount applied for a period to e
    11·1 answer
  • Stripes Inc. has a noncontributory defined pension plan for its employees. During 2020, the company had service cost of $45,000,
    6·1 answer
  • What is Independent demand and dependent demand?
    15·1 answer
  • Well-known responses to demands that occur in a normal, predictable way are known as.
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!