Solved: Find the expected variance of a portfolio securities, Finance Basics

+44 141 628 6080
[email protected]

Find the expected variance of a portfolio securities

Assume that the average variance of return for an individual security is 50 and that the average covariance is 10. What is the expected variance of a portfolio of 5, 10, 20, 50 and 100 securities. How many securities need to be held before the risk of a portfolio is only 10% more than the minimum?

Solution Preview :

Prepared by a verified Expert

Finance Basics: Find the expected variance of a portfolio securities

Reference No:- TGS0557534

Now Priced at $20 (50% Discount)

Recommended (92%)

Rated (4.4/5)

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Recent Questions Asked Finance Basics

Q : Market required return on investment

The common stock of the Nicolas Corporation is currently selling at $80 per share. The leadership of the company intends to pay a $4 per share dividend next year. With the expectation that the dividend will grow at 5% perpetually, what will the m

Q : What proportion investor wealth in riskless asset

What proportion of the following investor's wealth would you suggest investing in the market portfolio and what proportion in the riskless asset?

Q : Dividend yield-capital gain yield

N Company's last dividend, D0, was $1. Earnings and dividends are expected to grow at a 5 percent rate. The required rate of return on the stock is 13 percent. The current stock price is $25. What is the expected dividend yield and expected capita

Q : Question-arbitrage pricing model

Suppose a three-factor APM holds and the risk-free rate is 6 percent. You are interested in two particular stocks. A and B. The returns on both stocks are related to factors 1 and 2 as follows.

Q : Find the expected variance of a portfolio securities

What is the expected variance of a portfolio of 5, 10, 20, 50 and 100 securities. How many securities need to be held before the risk of a portfolio is only 10% more than the minimum?

Q : To which financial ratios would pay most attention

If you were a credit manager, to which financial ratios would you pay most attention? Which do you think would be the least informative?

Q : Find cash and late payers charged interest

Why do firms grant cofee credit? Would it be more efficient if all sales were for cash and late payers were charged interest?

Q : Would firms cash balances go up or down relative to sales

Suppose that the rate of inflation accelerates from 5 to 10 percent per year. Would firms' cash balances go up or down relative to sales? Explain.

Q : Which offers the higher annual yield

A three-month Treasury bill and a six-month bill both sell at a discount of 10 percent. Which offers the higher annual yield?

1959660

Questions
Asked

3,689

Active Tutors

1436106

Questions
Answered

Start Excelling in your courses, Ask a tutor for help and get answers for your problems !!

ask Question

Solution Preview :

Prepared by a verified Expert

Finance Basics: Find the expected variance of a portfolio securities

Reference No:- TGS0557534

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Market required return on investment

Q : What proportion investor wealth in riskless asset

Q : Dividend yield-capital gain yield

Q : Question-arbitrage pricing model

Q : Find the expected variance of a portfolio securities

Q : To which financial ratios would pay most attention

Q : Find cash and late payers charged interest

Q : Would firms cash balances go up or down relative to sales

Q : Which offers the higher annual yield

How does the image of women in the afterlife change

Describe the mehfil-e-sama in india

How will your work impact creation

Compare the different understandings of chaos

Which author said that sports can be thought of as religion

How would you define altruism

Explain ropkes thought

Solution Preview :

Prepared by a verified Expert

Finance Basics: Find the expected variance of a portfolio securities

Reference No:- TGS0557534

Recent Questions Asked Finance Basics

Q : Market required return on investment

Q : What proportion investor wealth in riskless asset

Q : Dividend yield-capital gain yield

Q : Question-arbitrage pricing model

Q : Find the expected variance of a portfolio securities

Q : To which financial ratios would pay most attention

Q : Find cash and late payers charged interest

Q : Would firms cash balances go up or down relative to sales

Q : Which offers the higher annual yield

Asked Questions