Answer:
The volatility of this equally weighted portfolio is closest to 0.31
Explanation:
Individual Stock + ( 1 - 1/n) * Average Covariance between the stocks
Var = ( 1 / 5) (0.40)2 + ( 1 - 1/5) (0.5( (0.4) (0.4)
Var = 0.096
standard deviation = Square root of variance
= Square root of 0.096
= 0.31
The benefits of portfolio diversification can be obtained if the fund manager adds the stocks which are less than perfectly correlated. In other words, the stocks in a portfolio should have coefficient correlation lesser than 1. The market portfolio is considered to be fully diversified, this is why if the stocks with high correlation with market portfolio is added to our own portfolio, it will approach to the fully diversified portfolio and help in reducing the total risk.
Dina was swimming for 37 minutes
The real exchange rate ( RER ) is the ratio of the price level abroad and the domestic price level.
RER = ( Nominal Exchange Rate x Foreign Price ) / ( Domestic Price )
The price of sofa is 2,400 pesos in Argentina and the nominal exchange rate is 4 pesos per dollar ( 2,400 : 4 = $600 )
RER = 4 x $600 / $800 = 3
Answer: The Real Exchange Rate is 3 pesos per dollar.
Answer:
7.5 hours
Explanation:
Let m = macro's work rate
Cliffs work rate = m/2 since macro does the work two times faster than cliff.
(M/2) + M = 5 hours
Solving for m , m = 7.5 hours.
Thus, it would take macros 7.5 hours working alone