Business and Finance Homework

Need finance homework help? Ask an Expert

Ask an Expert,
Get an Answer ASAP!

Consider three risky assets A, and C, with expected return…

Customer Question
Consider three risky assets A...
Consider three risky assets A, B and C, with expected return E[RA] = 11%, E[RB] =14% and E[RA] = 15% and standard deviation A = 25%, B = 30% and C = 32%,
respectively. The covariance between asset A and asset B is Cov(RA;RB) = 0:0125, the covariance between asset B and asset C is Cov(RB;RC) = 􀀀0:025 and the covariance between asset A and asset C is Cov(RA;RC) = 0:05.
(A) Calculate the correlation matrix, i.e. the correlation of each pair of assets.
(B) Calculate the expected return and standard deviation of a portfolio with weights wA = 0:4, wB = 0:3 and wC = 0:3 in assets A, B and C respectively.
(C) How would the risk (i.e. the standard deviation of the portfolio) change, if the covariance between asset B and asset C had a positive sign (keeping everything else unchanged)? No need for calculation. Give a verbal answer with reasonable argument.
(D) Can you achieve diversification effect (i.e. reduction of the standard deviation by combining assets in a portfolio) if the assets are perfectly correlated (i.e. the correlation coefficient is 1 for all pairs of assets)?
(E) How will the diversification effect (i.e. the risk reduction achieved by combining the assets in the portfolio) change if the expected return of all three assets increases by 3 percentage points?
Submitted: 2 years ago.Category: Business and Finance Homework
Show More
Show Less
Ask Your Own Business and Finance Homework Question
Answered in 5 hours by:
1/21/2016
Business Tutor: F. Naz, Bachelor's Degree replied 2 years ago
F. Naz
F. Naz, Bachelor's Degree
Category: Business and Finance Homework
Satisfied Customers: 5,491
Experience: Have completed B.COM and CA Finalist
Verified

What is your deadline, thanks.

Ask Your Own Business and Finance Homework Question
Customer reply replied 2 years ago
7 hours
Business Tutor: F. Naz, Bachelor's Degree replied 2 years ago

The time is too short, therefore opting out so other experts may help you, thanks.

Ask Your Own Business and Finance Homework Question
Customer reply replied 2 years ago
I need an answer within the the next 10 hours please. I had wanted the answer sooner to review.
Customer reply replied 2 years ago
Should I worry since I haven't had a response that someone will help me? This is not giving me peace of mind.
Customer reply replied 2 years ago
I want to withdraw my question. Good bye.
Customer reply replied 2 years ago
If there is anyone who can help me, I would appreciate it, but if not I need to know.
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a business tutorLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask linda_us Your Own Question
linda_us
linda_us
linda_us, Master's Degree
Category: Business and Finance Homework
Satisfied Customers: 852
852 Satisfied Customers
Experience: A tutor for Business, Finance, Accounts and other related topics.

linda_us is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

I couldn't be more satisfied! This is the site I will always come to when I need a second opinion.

JustinKernersville, NC

Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around.

EstherWoodstock, NY

Thank you so much for taking your time and knowledge to support my concerns. Not only did you answer my questions, you even took it a step further with replying with more pertinent information I needed to know.

RobinElkton, Maryland

He answered my question promptly and gave me accurate, detailed information. If all of your experts are half as good, you have a great thing going here.

DianeDallas, TX

< Previous | Next >

Meet the Experts:

linda_us

linda_us

Master's Degree

852 satisfied customers

A tutor for Business, Finance, Accounts and other related topics.

F. Naz

F. Naz

Bachelor's Degree

5,491 satisfied customers

Have completed B.COM and CA Finalist

Bizhelp

Bizhelp

Accountant

260 satisfied customers

BA degree and Certified Public Accountant

224 satisfied customers

dasdasd

Mr. Gregory White

Mr. Gregory White

Master's Degree

211 satisfied customers

M.A., M.S. Education / Educational Administration

Brittany

Brittany

Professional

30 satisfied customers

AA/Accounting BS/Business

Dimitry K., Esq.

Dimitry K., Esq.

Doctoral Degree

19 satisfied customers

JD/MBA, Business Attorney

< Previous | Next >

Related Business and Finance Homework Questions
Assignment 1. Plot in Excel the risky asset opportunity set
Assignment 1. Plot in Excel the risky asset opportunity set for Portfolios A & B. Hint: create the following table in excel assuming weights of portfolio A & B in 10 percentage point increments. Then … read more
F. Naz
F. Naz
Bachelor's Degree
5,491 satisfied customers
Here is the mini case study that I need help with--it is due
Here is the mini case study that I need help with--it is due tonight so please help ASAP! You are discusing your 401K with Dan Ervin, when he mentions that SarahBrown, a representative from Bledsoe Fi… read more
Expert
Expert
LINDA!!! It looks as if you've done this already - can you
LINDA!!! It looks as if you've done this already - can you help me with the following: there are 56 multi choice and 14 problems~! Not sure how many posted here. 1. This is the risk that a security is… read more
linda_us
linda_us
Master's Degree
Master's Degree
852 satisfied customers
4.5 Optimal Portfolio Choice IV Consider a financial market
4.5 Optimal Portfolio Choice IV Consider a financial market with only two risky assets S1 and S2, whose returns we denote by R1 and R2. For i = 1, 2, let μi denote the expected return on the risky ass… read more
Mr. Gregory White
Mr. Gregory White
Master's Degree
Master's Degree
211 satisfied customers
Use Excel column K observation numbers 64 through 123 (2002m01
Use Excel column K observation numbers 64 through 123 (2002m01 – 2006m12) to answer the following questions: https://app.box.com/s/8w0hcwfuxx7f90mhsad0 1. What is the average return for each of the ni… read more
Mr. Gregory White
Mr. Gregory White
Master's Degree
Master's Degree
211 satisfied customers
Deadline: Monday the 11 @ 10pm.Consider the following capital
Deadline: Monday the 11 @ 10pm. Consider the following capital market: a risk-free asset yielding 1.50% per year and a mutual fund consisting of 60% stocks and 40% bonds. The expected return on stocks… read more
getsetgo
getsetgo
Master\u0027s Degree
496 satisfied customers
1. In which of the following situations would you get the
1. In which of the following situations would you get the largest benefit from diversifying your investment across two stocks? a. there is perfect positive correlation b. there is perfect negative cor… read more
Mr. Gregory White
Mr. Gregory White
Master's Degree
Master's Degree
211 satisfied customers
True/FalseIndicate whether the sentence or statement is true
True/False Indicate whether the sentence or statement is true or false. 1. It takes longer than eight years to retire a $24,000 loan at 8% if the annual payment is $3,000. 2. An annuity of $100 for te… read more
Expert
Expert
224 satisfied customers
Hello Ms Linda! Im back with more questions!!! I just tried
Hello Ms Linda! I'm back with more questions!!! I just tried to do one on my own - I made a 60 =( So I think I will just let you do the rest!!! I'm sending you two different emails. This one first. Yo… read more
linda_us
linda_us
Master's Degree
Master's Degree
852 satisfied customers
While bond investor may focus primarily on coupon interest
While bond investor may focus primarily on coupon interest received, the total return on bond held to maturity may also depend on: Changes in interest rates Capital gain or loss Adjustments to par val… read more
linda_us
linda_us
Master's Degree
Master's Degree
852 satisfied customers
The Amex has had particular success through pioneering the
The Amex has had particular success through pioneering the trading of: a. Currency futures b. Corporate futures c. Technology start up companies d. Exchange traded funds The stock of a company in fina… read more
linda_us
linda_us
Master's Degree
Master's Degree
852 satisfied customers
Consider the following capital market: a risk-free asset yielding
Consider the following capital market: a risk-free asset yielding 1.50% per year and a mutual fund consisting of 55% stocks and 45% bonds. The expected return on stocks is 9.00% per year and the expec… read more
getsetgo
getsetgo
Master\u0027s Degree
496 satisfied customers
Consider the following capital market: a risk-free asset yielding
Consider the following capital market: a risk-free asset yielding 1.50% per year and a mutual fund consisting of 55% stocks and 45% bonds. The expected return on stocks is 9.00% per year and the expec… read more
R.R. Jha
R.R. Jha
Bachelor\u0027s Degree
150 satisfied customers
hi finc prof, i have gotten quite alot of finace anwers from
hi finc prof, i have gotten quite alot of finace anwers from you and im very satisfied. i really need help with the financial investment case . i know this assignment need alittle extra time to work o… read more
Finley
Finley
Master's Degree
57 satisfied customers
Download the Monthly Adjusted Prices” spreadsheets for Coca-Cola,
Download the “Monthly Adjusted Prices” spreadsheets for Coca-Cola, Citigroup, and Pfizer from the Standard & Poor's Market Insight Web site www.mhhe.com/edumarketinsight). A. Calculate the annual stan… read more
getsetgo
getsetgo
Master\u0027s Degree
496 satisfied customers
1. In a simple CAPM world which of the following statements
1. In a simple CAPM world which of the following statements is/are correct? I. All investors will choose to hold the market portfolio, which includes all risky assets in the world II. Investors' compl… read more
Bizhelp
Bizhelp
Accountant
Bachelor's Degree
260 satisfied customers
1/If the distribution of returns for an asset has a variance
1/If the distribution of returns for an asset has a variance of zero, then covariance of returns between that asset and the returns any other asset must equal zero. True or False...... 2/A stock with … read more
Stephen, MBA
Stephen, MBA
Master's Degree
166 satisfied customers
Question 1 (Portfolio returns and risk) There are four securities
Question 1 (Portfolio returns and risk) There are four securities and five possible economic scenarios. The probability of occurrence and security returns are given below. a. Calculate the expected re… read more
Expert
Expert
224 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x