Calculate the risk (standard deviation)of a $100,000 portfolio consisting of $50,000 of Sunspray Products Ltd (SPL)and $50,000 of Raincoats Galore Ltd (RGL)shares.The standard deviation of returns for SPL and RGL respectively are 6.68% and 10.60%,and the covariances of returns on the shares is - 0.0031.
What does your answer tell you about this portfolio?
Correct Answer:
Verified
= (0.5 × 0.0668)2 + (0.5 × 0.106)2 + 2[0....
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q19: In the equation, Q20: Which of the following combinations would result Q21: Historically,the stock market indices strongly suggest that Q22: What does beta measure? Q23: In addition to inflation risk,10- year government Q25: If two stocks are perfectly positively correlated,then Q26: Which of these is the main index Q27: Consider the following forecasts of the likely Q28: Consider the following historic set of returns Q29: Consider the following forecasts of the likely
A)The amount of business
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents