Your Perfect Assignment is Just a Click Away
We Write Custom Academic Papers

100% Original, Plagiarism Free, Customized to your instructions!

How It Works
Order Now
Order Now
glass
pen
clip
papers
heaphones

Should investors generally expect positive correlations between stocks and bonds? Bonds and bills? Stocks and real estate? Stocks and gold?

Business and Finance

Business and Finance

Should investors generally expect positive correlations between stocks and bonds? Bonds and bills? Stocks and real estate? Stocks and gold?

7.5 What does it mean to say that portfolio weights sum to 1.0 or 100 percent?

 

7.8 Evaluate this statement: With regard to portfolio risk, the whole is not equal to the sum of the parts.

 

7.15 Should investors generally expect positive correlations between stocks and bonds? Bonds and bills? Stocks and real estate? Stocks and gold?

7.16 What are the inputs for a set of securities using the Markowitz model?

 

Excel exercise

 

7.3 Fill in the spreadsheet below to calculate the portfolio return and risk between Zenon and Dynamics, given the 10 years of annual returns for each stock and portfolio weights of 50/50.

How would your answer change if the weights were 40 percent for Zenon and 60 percent for Dynamics?

How would your answer change if the weights were 30 percent for Zenon and 70 percent for Dynamics?

  Zenon Dynamics
Expected return    
Variance    
Standard deviation    
Covariance    
Weight for Zenon 50%  
Weight for Dynamics 50%  
Expected portfolio return    
Portfolio variance    
Portfolio standard deviation    

 

Zenon return dynamics return  
9.89 -47.67 2018
-12.34 30.79 2017
13.56 24.78 2016
34.56 7.89 2015
-15.23 24.42 2014
20.09 34.56 2013
7.56 67.56 2012
16.47 44.67 2011
18.34 78.56 2010
15.56 51 2009
     

 

 

8.1 Consider a diagram of the efficient frontier. The vertical axis is ________. The horizontal axis is ________, as measured by the ________.

 

8.3 Why do rational investors seek efficient portfolios?

 

8.6 What does it mean to say that combining the efficient frontier with indifference curves matches possibilities with preferences?

 

8.12 How well does diversification work in reducing the risk of a portfolio? Are there limits to diversification? Do the effects kick in immediately?

 

 

Excel Chart

8.1 Closing prices for SilTech and New Mines for the years 2003–2018 are shown below.

a) Calculate the return for each stock for each year to three decimal places.

b) Assume that similar returns will continue in the future (i.e., average returns = expected returns). Calculate the expected return, variance, and standard deviation for both stocks and insert these values in the spreadsheet. Use AVERAGE, VAR.S, and STDEV functions.

c) Calculate the covariance between the two stocks.

d) Using the 11 different proportions that SilTech could constitute of the portfolio ranging from 0 to 100 percent in 10 percent increments, calculate the portfolio variance, standard deviation, and expected return.

e) Plot the trade-off between return and risk for these two stocks based on the calculation in (d). Use the XY scatter diagram in Excel.

  SilTech NewMines
2018 198.08 21.634
2017 84.84 34.867
2016 71.89 44.67
2015 32.2 49.8
2014 10.69 49.55
2013 7.16 46.86
2012 10.95 53.11
2011 7.44 48.75
2010 25.7 63.12
2009 10.23 37.04
2008 3.28 31.67
2007 5.22 21.78
2006 7.97 14.45
2005 9.64 9.39
2004 7.13 14.99
2003 14.39 10.72

Why you should trust INFINITE ESSAYS with your essay

  • ✓ Professional & Expert Writers
  • ✓ Top Quality Papers:
  • ✓ Plagiarism-Free Papers:
  • ✓ Timely Delivery:
  • ✓ Affordable Prices
  • ✓ 24/7 Customer Support:

Order Solution Now

HOW TO PLACE AN ORDER

  1. Clіck оn the “Place оrder” tab at the tоp menu оr “Order Nоw” іcоn at the bоttоm, and a new page wіll appear wіth an оrder fоrm tо be fіlled.
  2. Fіll іn yоur paper’s іnfоrmatіоn and clіck “PRІCE CALCULATІОN” at the bоttоm tо calculate yоur оrder prіce.
  3. Fіll іn yоur paper’s academіc level, deadlіne and the requіred number оf pages frоm the drоp-dоwn menus.
  4. Clіck “FІNAL STEP” tо enter yоur regіstratіоn detaіls and get an accоunt wіth us fоr recоrd keepіng.
  5. Clіck оn “PRОCEED TО CHECKОUT” at the bоttоm оf the page.
  6. Frоm there, the payment sectіоns wіll shоw, fоllоw the guіded payment prоcess, and yоur оrder wіll be avaіlable fоr оur wrіtіng team tо wоrk оn іt.

Nоte, оnce lоgged іntо yоur accоunt; yоu can clіck оn the “Pendіng” buttоn at the left sіdebar tо navіgate, make changes, make payments, add іnstructіоns оr uplоad fіles fоr the оrder created. e.g., оnce lоgged іn, clіck оn “Pendіng” and a “pay” оptіоn wіll appear оn the far rіght оf the оrder yоu created, clіck оn pay then clіck оn the “Checkоut” оptіоn at the next page that appears, and yоu wіll be able tо cоmplete the payment.

Meanwhіle, іn case yоu need tо uplоad an attachment accоmpanyіng yоur оrder, clіck оn the “Pendіng” buttоn at the left sіdebar menu оf yоur page, then clіck оn the “Vіew” buttоn agaіnst yоur Order ID and clіck “Fіles” and then the “add fіle” оptіоn tо uplоad the fіle.

Basіcally, іf lоst when navіgatіng thrоugh the sіte, оnce lоgged іn, just clіck оn the “Pendіng” buttоn then fоllоw the abоve guіdelіnes. оtherwіse, cоntact suppоrt thrоugh оur chat at the bоttоm rіght cоrner

NB

Payment Prоcess

By clіckіng ‘PRОCEED TО CHECKОUT’ yоu wіll be lоgged іn tо yоur accоunt autоmatіcally where yоu can vіew yоur оrder detaіls. At the bоttоm оf yоur оrder detaіls, yоu wіll see the ‘Checkоut” buttоn and a checkоut іmage that hіghlіght pоssіble mоdes оf payment. Clіck the checkоut buttоn, and іt wіll redіrect yоu tо a PayPal page frоm where yоu can chооse yоur payment оptіоn frоm the fоllоwіng;

  1. ‘Pay wіth my PayPal accоunt‘– select thіs оptіоn іf yоu have a PayPal accоunt.
  2. ‘Pay wіth a debіt оr credіt card’ or ‘Guest Checkout’ – select thіs оptіоn tо pay usіng yоur debіt оr credіt card іf yоu dоn’t have a PayPal accоunt.
  3. Dо nоt fоrget tо make payment sо that the оrder can be vіsіble tо оur experts/tutоrs/wrіters.

Regards,

Custоmer Suppоrt

Order Solution Now