Question
Support Remaining Time: 49 minutes, 00 seconds. Question Completion Status: Use the following information to answer...
Support Remaining Time: 49 minutes, 00 seconds. Question Completion Status: Use the following information to answer the following three questions. Month Stock A Returns Stock B Returns 1/1/2012 -0.1 0.15 2/1/2012 0.25 -0.05 3/1/2012 0.20 Find the covariance between stocks A and B. Round intermediate steps to four decimals. O-0013 0.0008 0.0024 O-0116 5 points QUESTION 7 Find the standard deviation of stark Round intermediate stene in four decimale Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Save
* Question Completion Status: QUESTION 7 Find the standard deviation of stock B. Round intermediate steps to four decimals. 0.2566 0.1323 0.1646 0.1423 QUESTION 8 Find the standard deviation of the minimum variance portfolio. Round intermediate steps to four decimals. .0956 Click Save and Submit to save and submit. Click Save An Answers to save all answers, Save All An
Question Completion Status: QUESTION 8 Find the standard deviation of the minimum variance portfolio. Round intermediate steps to four decimals. 0.0956 0.2158 O.2014 0.1158 QUESTION 9 Which statement about portfolio diversification is correct? Proper diversification can eliminate systematic risk. Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answe
Answers
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -
Hope it will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.
A B C D Stock B Returns Month 1/1/2012 2/1/2012 3/1/2012 Stock A Returns -0.10 0.25 0.40 0.15 -0.05 0.20 M700 6 Covariance(A,B) -0.0013 7 Standard deviation of Stock B 0.1323 9 10 11 Standard deviation of Stock A 0.2566 12 13 8 14 Minimum variance Portfolio (MVP) Stock A Stock B Weight 0.2185 0.7815 Standard deviation of MVP 0.1158Month Stock A Returns 40909 40940 40969 -0.1 0.25 0.4 Stock B Returns 0.15 -0.05 0.2 76 Covariance(A,B) =COVARIANCE.S(C3:C5,D3:05) Standard deviation of Stock B =ROUND(STDEV.S(D3:D5),4) 9 7 10 11 12 13 8 Standard deviation of Stock A =ROUND(STDEV.S(C3:C5),4) 14 Minimum variance Portfolio (MVP) Stock A Stock B Weight =ROUND((C9^2-07)/(C11^2+C92-2*C7),4) =ROUND(1-C14,4) 15 16 17 Standard deviation of MVP =SQRT((C14*C11)^2+(C15*C9)^2+2*C14*C15*07) |
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