This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Elizabeth has decided to form a portfolio by putting 30 of her money into stock 1 and 70 into stock ... (Read 137 times)

sarasara

  • Hero Member
  • *****
  • Posts: 521
on: Aug 1, 2018
Elizabeth has decided to form a portfolio by putting 30 of her money into stock 1 and 70 into stock 2 . She assumes that the expected returns will be 10 and 18, respectively, and that the standard deviations will be 15 and 24, respectively. Describe what happens to the standard deviation of the portfolio returns when the coefficient of correlation p decreases.

Question 2

Under certain conditions where n is large enough, you can approximate the ___________________ _ distribution using the ___________________ _ distribution.
 Fill in the blank(s) with correct word


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

lorealeza

  • Sr. Member
  • ****
  • Posts: 345
Reply #1 on: Aug 1, 2018
Answer to Question 1

The standard deviation of the portfolio returns decreases as the coefficient of correlation decreases.

Answer to Question 2

binomial; normal


sarasara

  • Member
  • Posts: 521
Reply 2 on: Aug 1, 2018
Gracias!

rleezy04

  • Member
  • Posts: 322
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Only one in 10 cancer deaths is caused by the primary tumor. The vast majority of cancer mortality is caused by cells breaking away from the main tumor and metastasizing to other parts of the body, such as the brain, bones, or liver.

Did you know?

About 100 new prescription or over-the-counter drugs come into the U.S. market every year.

Did you know?

Pope Sylvester II tried to introduce Arabic numbers into Europe between the years 999 and 1003, but their use did not catch on for a few more centuries, and Roman numerals continued to be the primary number system.

Did you know?

Cytomegalovirus affects nearly the same amount of newborns every year as Down syndrome.

Did you know?

Addicts to opiates often avoid treatment because they are afraid of withdrawal. Though unpleasant, with proper management, withdrawal is rarely fatal and passes relatively quickly.

Some of the bacteria that can fix atmospheric nitrogen, converting it into a form usable by plants. Some of the bacteria that can fix atmospheric nitrogen, converting it into a form usable by plants.
MDCK cells can form cysts in culture MDCK cells can form cysts in culture
Instructions for Completing the CMS-1500 (02/12) Claim Form Continued Instructions for Completing the CMS-1500 (02/12) Claim Form Continued
Instructions for Completing the CMS-1500 (02/12) Claim Form Continued Instructions for Completing the CMS-1500 (02/12) Claim Form Continued
Example of an employee performance evaluation form Cont Example of an employee performance evaluation form Cont
How to write a quadratic equation in standard form when a graph is given How to write a quadratic equation in standard form when a graph is given
Video: Lipid absorption - end products & transport mechanism

For a complete list of videos, visit our video library