How much does diversification reduce the var, Accounting Basics

+44 141 628 6080
[email protected]

How much does diversification reduce the var

Consider a position consisting of a300, 000 investments in gold and a 500,000 investment in silver. Suppose that the daily volatilities of these two asset are 1.8% and 1.2 % respectively and that the coefficient of correlation between their return is 6./0 what is the 10 days 97.5% VaR for portfolio? By how much does diversification reduce the VaR?

Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: How much does diversification reduce the var

Reference No:- TGS0704975

Expected delivery within 24 Hours

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Recent Questions Asked Accounting Basics

Q : What is fs recognized gain or loss

F contributes cash of $7,500 and land worth $52,500 (basis of $16,500) to an entity for a 75% ownership interest in the entity, which was created three years ago by G who had contributed $15,000 cash back then.

Q : Why the company applies the npv decision rule

If the required rate of return is 10 percent and Robb Computer applies the profitability index decision rule, which project should the firm accept?

Q : What is the bonus to the new partner

Kensington's capital balance is $33,860 after admitting Atchley to the partnership by investment. If Kensington's ownership interest is 20% of total partnership capital, what were (1) Atchley's cash investment and (2) the bonus to the new partner?

Q : Estimate a confidence interval for the var estimate

Suppose that a 1-day 97.5% VaR is estimated as $13 million from 2.000 observations. The observations on the 1-day changes are approximately normal with mean 0 and standard deviation $6 million.

Q : How much does diversification reduce the var

uppose that the daily volatilities of these two asset are 1.8% and 1.2 % respectively and that the coefficient of correlation between their return is 6./0 what is the 10 days 97.5% VaR for portfolio? By how much does diversification reduce the VaR

Q : Describes the use of health savings

A BusinessWeek article titled, "HSAs Could Keep You in the Pink," by Christopher Farrell describes the use of health savings accounts (HSA). HSAs were authorized by Congress.

Q : Calculate net income for reporting purposes

Hoffman's Hotel has total revenue of $900,000; expenses other than depreciation of $400,000; depreciation expense for tax purposes of $250,000; and depreciation expense of $180,000 for reporting purposes.

Q : Discuss the declining balance method for all four years

What is the amount of depreciation, using the declining balance method for all four years of use for equipment costing $ 12,000, with an estimated residual value of $ 1,100 and an estimated life of 4 years?

Q : Calculate the investment income and the ending balance

Hoffman's Hotel has total revenue of $900,000; expenses other than depreciation of $400,000; depreciation expense for tax purposes of $250,000; and depreciation expense of $180,000.

1930933

Questions
Asked

3,689

Active Tutors

1422968

Questions
Answered

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

ask Question

Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: How much does diversification reduce the var

Reference No:- TGS0704975

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

Q : What is fs recognized gain or loss

Q : Why the company applies the npv decision rule

Q : What is the bonus to the new partner

Q : Estimate a confidence interval for the var estimate

Q : How much does diversification reduce the var

Q : Describes the use of health savings

Q : Calculate net income for reporting purposes

Q : Discuss the declining balance method for all four years

Q : Calculate the investment income and the ending balance

Which of the things happened first

How sociological models help understand mental illness

Discuss statements about sociological approaches

How coastlines are vulnerable to multiple climate change

What cases does female status tend to be highest

What when people get involved in community and social change

Discussion about idea of the tramp stamp

Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: How much does diversification reduce the var

Reference No:- TGS0704975

Recent Questions Asked Accounting Basics

Q : What is fs recognized gain or loss

Q : Why the company applies the npv decision rule

Q : What is the bonus to the new partner

Q : Estimate a confidence interval for the var estimate

Q : How much does diversification reduce the var

Q : Describes the use of health savings

Q : Calculate net income for reporting purposes

Q : Discuss the declining balance method for all four years

Q : Calculate the investment income and the ending balance

Asked Questions