18) The standard deviation of a portfolio is always just the weighted average of the standard deviations of assets in the portfolio. 7) The expected return on MSFT next year is 12% with a standard deviation of 20%. The expected return on AAPL next year is 24% with a standard deviation of 30%. If James makes equal investments in MSFT and AAPL, what is the expected return on his portfolio. If James makes equal investments in MSFT and AAPL, what is the expected return on his portfolio. 31) Investing in foreign boutiques s is one way to improve diversification of a portfolio. They are near the bottom once again and by most they appear to be making there way to the top again. Sony's next-generation console launched in the US way back on Nov. 12, but inventory has been no match for demand. As of Tuesday afternoon, BAC is trading back over $15.


This was due to an unusually high amount of trading with a record 16.4 million shares traded on that day. When the prices move above the trading range , it suggests that the demand is winning and if prices move below the trading range , it suggests supply is winning. None of the above because the coefficient of correlation cannot be negative. 21) A portfolio will always have less risk than the riskiest asset in it if the correlation of assets is less than perfectly positive. 8) The expected return on MSFT next year is 12% with a standard deviation of 20%. The expected return on AAPL next year is 24% with a standard deviation of 30%. The correlation between the two stocks is .6. 13) You are thinking of adding one of two investments to an already well diversified portfolio. FAZ is up 95% in less then two weeks. It is on my pick list again for 2009 as it is New Zealands best managed company and if management is good then results generally follow-this has been the history of the company thus far. 30) The benefit from diversification is far greater when the diversification occurs across asset types.





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