Here are the returns on two stocks. Digital Cheese Executive Fruit January +17 +9 February −2...
Here are the returns on two stocks.
| Digital Cheese | Executive Fruit | |||||||
| January | +17 | +9 | ||||||
| February | −2 | +1 | ||||||
| March | +4 | +5 | ||||||
| April | +6 | +15 | ||||||
| May | −3 | +2 | ||||||
| June | +2 | +5 | ||||||
| July | −1 | −2 | ||||||
| August | −7 | −1 | ||||||
Required:
a-1. Calculate the variance and standard deviation of each stock.
a-2. Which stock is riskier if held on its own?
b. Now calculate the returns in each month of a portfolio that invests an equal amount each month in the two stocks.
c. Is the variance more or less than halfway between the variance of the two individual stocks
Homework Answers
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Here are the returns on two stocks.
Digital Cheese
Executive Fruit
January
+17
+9
February
−2...
Problem 7-12 Diversification Here are the percentage returns on two stocks. Digital Cheese Executive Fruit n...
Problem 7-12 Diversification Here are the percentage returns on two stocks. Digital Cheese Executive Fruit n Month January February March April May June July August ya yang a-1. Calculate the monthly variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answers to 1 decimal places.) Digital Cheese Executive Fruit Variance Standard deviation % a-2. Which stock is the riskier if held on its own? Digital Cheese Executive Fruit b. Now calculate the variance and standard...
Digital Executive Cheese Fruit January February March April May June July August +7 +15 +4 +7 -4 -8 a-1. Calculate the variance and standard deviation of each stock. (Do not round intermediate calc...
Digital Executive Cheese Fruit January February March April May June July August +7 +15 +4 +7 -4 -8 a-1. Calculate the variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Digital Cheese Retum Executive Fruit Return Variance Standard deviatio a-2. Which stock is the riskier if held on its own? Digital Cheese O Executive Fruit b. Now calculate the returns in each month of a portfolio that invests an equal...
Calculate the variance and standard deviation of each stock Calculate portfolio returns from each month Here...
Calculate the variance and standard deviation of each stock
Calculate portfolio returns from each month
Here are the returns on two stocks. Digital Cheese Executive Fruit January February March +18 +6 -2 +2 +4 +5 April Мay +15 +6 -3 +2 June +3 +7 July August -1 -2 -7 -1 Required: a-1. Calculate the variance and standard deviation of each stock. a-2. Which stock is riskier if held on its own? b. Now calculate the returns in each month of...
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks: EEB No...
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks: EEB Note: The portfolio is composed of 50% of Stock A and 50% of Stock B a. What is the expected return and standard deviation of returns for each of the two stocks? b. What is the expected return and standard deviation of returns for the portfolio? c. Is the portfolio more or less risky than the two stocks? Why? Stock A Stock...
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2...
Consider the following 6 months of returns for 2 stocks and a
portfolio of those 2 stocks:
The
portfolio is composed of 50% of Stock A and 50% of Stock
B.
a. What is the expected return and standard deviation of returns
for each of the two stocks?
b. What is the expected return and standard deviation of returns
for the portfolio?
c. Is the portfolio more or less risky than the two stocks?
Why?
this is the entire question...
Suppose the expected returns and standards deviations of two stocks were stock A: E (R) =9%,...
Suppose the expected returns and standards deviations of two stocks were stock A: E (R) =9%, STANDARD DEVIATION = 36% STOCK B: E (R) = 15%, STANDARD DEVIATION = 62% A. calculate the expected return of a portfolio that is composed of 35% of stock A and 65% of stock B. b. calculate the standard deviation of this portfolio when the correlation coefficient between the returns is 0.5 c. calculate the standard deviation of this portfolio (same weights in each...
Stocks A and B have the following historical returns: Year –rA –r 2009 −18% −24% 2010...
Stocks A and B have the following historical returns:
Year –rA –r
2009 −18% −24%
2010 44 24
2011 −22 −4
2012 22 8
2013 34 56
a. Calculate the average rate of return for each stock during the
5-year period. Assume
that someone held a portfolio consisting of 50% of Stock A and 50%
of Stock B.
What would have been the realized rate of return on the portfolio
in each year?
What would have been the average...
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2...
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks Note: The portfolio is composed of 50% of Stock A and 50% of Stock B a. What is the expected return and standard deviation of returns for each of the two stocks? b. What is the expected return and standard deviation of returns for the portfolio? c. Is the portfolio more or less risky than the two stocks? Why? a. What is the...
Please show working for all parts. 1. The annual returns of two stocks are given as...
Please show working for all parts.
1. The annual returns of two stocks are given as follows. Year Stock A Stock B 2011 -10% 21% 2012 2013 20% 5% 7% 30% 2014 -5% -3% 2015 2% -8% 2016 9% 25% (a) Estimate the expected return and volatility of each stock. (b) Estimate the covariance and correlation between two stocks. (c) Find the expected returns and volatilities of portfolios that maintain 100.6% investment in Stock A and 100(1-x)% in Stock B,...
2. You are given annual returns for stocks ABC and XYZ from the last 5 years:...
2. You are given annual returns for stocks ABC and XYZ from the last 5 years: Return on Stock ABC (in %) Return on Stock XYZ (in %) Year 1 11 9 2 12 7 13 6 4 15 5 5 14 11 a. What is your estimate of expected return for each of the stocks? b. What is your estimate of return standard deviation for each of the stocks? c. What is your estimate of the correlation between the...
Problem 7-12 Diversification Here are the percentage returns on two stocks. Digital Cheese Executive Fruit n Month January February March April May June July August ya yang a-1. Calculate the monthly variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answers to 1 decimal places.) Digital Cheese Executive Fruit Variance Standard deviation % a-2. Which stock is the riskier if held on its own? Digital Cheese Executive Fruit b. Now calculate the variance and standard...
Digital Executive Cheese Fruit January February March April May June July August +7 +15 +4 +7 -4 -8 a-1. Calculate the variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Digital Cheese Retum Executive Fruit Return Variance Standard deviatio a-2. Which stock is the riskier if held on its own? Digital Cheese O Executive Fruit b. Now calculate the returns in each month of a portfolio that invests an equal...
Calculate the variance and standard deviation of each stock
Calculate portfolio returns from each month
Here are the returns on two stocks. Digital Cheese Executive Fruit January February March +18 +6 -2 +2 +4 +5 April Мay +15 +6 -3 +2 June +3 +7 July August -1 -2 -7 -1 Required: a-1. Calculate the variance and standard deviation of each stock. a-2. Which stock is riskier if held on its own? b. Now calculate the returns in each month of...
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks: EEB Note: The portfolio is composed of 50% of Stock A and 50% of Stock B a. What is the expected return and standard deviation of returns for each of the two stocks? b. What is the expected return and standard deviation of returns for the portfolio? c. Is the portfolio more or less risky than the two stocks? Why? Stock A Stock...
Consider the following 6 months of returns for 2 stocks and a
portfolio of those 2 stocks:
The
portfolio is composed of 50% of Stock A and 50% of Stock
B.
a. What is the expected return and standard deviation of returns
for each of the two stocks?
b. What is the expected return and standard deviation of returns
for the portfolio?
c. Is the portfolio more or less risky than the two stocks?
Why?
this is the entire question...
Stocks A and B have the following historical returns:
Year –rA –r
2009 −18% −24%
2010 44 24
2011 −22 −4
2012 22 8
2013 34 56
a. Calculate the average rate of return for each stock during the
5-year period. Assume
that someone held a portfolio consisting of 50% of Stock A and 50%
of Stock B.
What would have been the realized rate of return on the portfolio
in each year?
What would have been the average...
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks Note: The portfolio is composed of 50% of Stock A and 50% of Stock B a. What is the expected return and standard deviation of returns for each of the two stocks? b. What is the expected return and standard deviation of returns for the portfolio? c. Is the portfolio more or less risky than the two stocks? Why? a. What is the...
Please show working for all parts.
1. The annual returns of two stocks are given as follows. Year Stock A Stock B 2011 -10% 21% 2012 2013 20% 5% 7% 30% 2014 -5% -3% 2015 2% -8% 2016 9% 25% (a) Estimate the expected return and volatility of each stock. (b) Estimate the covariance and correlation between two stocks. (c) Find the expected returns and volatilities of portfolios that maintain 100.6% investment in Stock A and 100(1-x)% in Stock B,...
2. You are given annual returns for stocks ABC and XYZ from the last 5 years: Return on Stock ABC (in %) Return on Stock XYZ (in %) Year 1 11 9 2 12 7 13 6 4 15 5 5 14 11 a. What is your estimate of expected return for each of the stocks? b. What is your estimate of return standard deviation for each of the stocks? c. What is your estimate of the correlation between the...
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