Questions from Corporate Finance

Q: Arbor Systems and Gencore stocks both have a volatility of 40%.

Arbor Systems and Gencore stocks both have a volatility of 40%. Compute the volatility of a portfolio with 50% invested in each stock if the correlation between the stocks is (a) +1, (b) 0.50, (c) 0,...

Q: Suppose Wesley Publishing’s stock has a volatility of 60%, while Addison

Suppose Wesley Publishing’s stock has a volatility of 60%, while Addison Printing’s stock has a volatility of 30%. If the correlation between these stocks is 25%, what is the volatility of the followi...

Q: Suppose Avon and Nova stocks have volatilities of 50% and 25

Suppose Avon and Nova stocks have volatilities of 50% and 25%, respectively, and they are perfectly negatively correlated. What portfolio of these two stocks has zero risk?

Q: Suppose Tex stock has a volatility of 40%, and Mex stock

Suppose Tex stock has a volatility of 40%, and Mex stock has a volatility of 20%. If Tex and Mex are uncorrelated, a. What portfolio of the two stocks has the same volatility as Mex alone? b. What por...

Q: Using the data in Table 11.1, a.

Using the data in Table 11.1, a. Compute the annual returns for a portfolio with 25% invested in North Air, 25% invested in West Air, and 50% invested in Tex Oil. b. What is the lowest annual return f...

Q: Using the data from Table 11.3, what is the

Using the data from Table 11.3, what is the volatility of an equally weighted portfolio of Microsoft, Alaska Air, and Ford Motor stock? Table 11.3:

Q: Suppose the average stock has a volatility of 50%, and the

Suppose the average stock has a volatility of 50%, and the correlation between pairs of stocks is 20%. Estimate the volatility of an equally weighted portfolio with (a) 1 stock, (b) 30 stocks, (c) 100...

Q: What is the volatility (standard deviation) of an equally weighted

What is the volatility (standard deviation) of an equally weighted portfolio of stocks within an industry in which the stocks have a volatility of 50% and a correlation of 40% as the portfolio becomes...

Q: See Table 2.5 showing financial statement data and stock price

See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. What were Mydeco’s retained earnings each year? b. Using the data from 2012, what was Mydeco&a...

Q: Consider an equally weighted portfolio of stocks in which each stock has

Consider an equally weighted portfolio of stocks in which each stock has a volatility of 40%, and the correlation between each pair of stocks is 20%. a. What is the volatility of the portfolio as the...