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Author Question: Stock A has an expected return of 10% and a standard deviation of 10%. Stock B has an expected ... (Read 58 times)

casperchen82

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Question 1

Risk that affects all firms is called
◦ management risk.
◦ nondiversifiable risk.
◦ diversifiable risk.
◦ total risk.

Question 2

Stock A has an expected return of 10% and a standard deviation of 10%. Stock B has an expected return of 15% and a standard deviation of 20%. The two stocks are perfectly negatively correlated (ρ1,2 = -1). What set of weights yields a portfolio with a zero variance?
◦ 2/3 in Stock A; 1/3 in Stock B
◦ 2/3 in Stock B; 1/3 in Stock A
◦ 2 in Stock A; -1 in Stock B
◦ 2 in Stock B; -1 in Stock A
◦ None of these.


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Marked as best answer by casperchen82 on Apr 25, 2021

courtney_bruh

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casperchen82

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Reply 2 on: Apr 25, 2021
Thanks for the timely response, appreciate it


ttt030911

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Reply 3 on: Yesterday
Wow, this really help

 

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