How is the standard deviation of returns for individual common stocks or for a stock portfolio calculated?
Standard Deviation of returns of stock is calculated by
calculating sum of square of deviation of the returns from the
average.
Standard Deviation Deviation of individual stocks = ((
Returni
-Averagei)^2/(n-1))^0.5, where n be the number of stocks.
Standard Deviation o Portfolio is calculated as follows.
Standard Deviation of Portfolio = (( Weight of A*
Standard Deviation of A)2 + ( Weight of B* Standard
Deviation of B)2 +2 * Weight of A* Weight of B* Standard
Deviation of A * Standard Deviation of B* Correlation
coefficient)0.5
How is the standard deviation of returns for individual common stocks or for a stock portfolio...
A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 35%, while stock B has a standard deviation of return of 15%. The correlation coefficient between the returns on A and B is .45. Stock A comprises 40% of the portfolio, while stock B comprises 60% of the portfolio. The standard deviation of the return on this portfolio is _________. Please show all work.
A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 20%, while stock B has a standard deviation of return of 26%. Stock A comprises 60% of the portfolio, while stock B comprises 40% of the portfolio. If the variance of return on the portfolio is .035, the correlation coefficient between the returns on A and B is _________.
A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 35%, while stock B has a standard deviation of return of 15%. The correlation coefficient between the returns on A and B is .45. Stock A comprises 10% of the portfolio, while stock B comprises 90% of the portfolio. The standard deviation of the return on this portfolio is closest to: A. 13.9% B. 7.4% C. 19.2% D. 15.4%
A 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 deviation 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 _________. 0.584 0.140 0.351 0.234
A portfolio is comprised of two stocks, A and B. Stock A has a standard deviation of return of 25% while stock B has a standard deviation of return of 5%. Stock A comprises 20% of the portfolio while stock B comprises 80% of the portfolio. If the variance of return on the portfolio is .0080, the correlation coefficient between the returns on A and B is __________. A. -.975 B. -.025 C. .025 D. .975
What is the standard deviation of the returns on a portfolio that is invested in Stocks A, B, and C? Twenty percent of the portfolio is invested in Stock A and 35 percent is invested in Stock C. Probability of State of Rate of Return State of Economy Economy if State Occurs Stock Stock A Stock B Boom 04 .17 .09 .09 Normal .81 .08 .06 Recession .15 - 24 .02 - a. 3.28% O b. 4.91% OC 5.65% O...
The standard deviation of annual returns for Stock Y is 44%. The standard deviation of annual returns for Stock Z is 74%. The correlation between the two stocks' returns is +1. If you decide to buy $4400 worth of Stock Z, figure out how much of Stock Y you need to buy or sell in order to create a net-short hedge portfolio. Then, for your answer, type the initial value of the portfolio. Since the portfolio is net-short, type your answer...
The standard deviation of annual returns for Stock Y is 45%. The standard deviation of annual returns for Stock Z is 71%. The correlation between the two stocks' returns is +1. If you decide to buy $4500 worth of Stock Z, figure out how much of Stock Y you need to buy or sell in order to create a net-short hedge portfolio. Then, for your answer, type the initial value of the portfolio. Since the portfolio is net-short, type your answer...
Describe how variance and standard deviation are used to measure the variability of individual stocks. Explain how an investor chooses the best portfolio of stock to hold.
Expected Returns 0.17 0.11 0.30 Standard Deviation 0.12 0.05 Firm A's common stock Firm B's common stock Correlation coefficient (Computing the standard deviation for a portfolio of two risky investments) Mary Guilott recently graduated from college and is evaluating an investment in two companies' common stock. She has collected the following information abou the common stock of Firm A and Firm B: a. If Mary decides to invest 10 percent of her money in Firm A's common stock and 90...