Eureka ... I Got It....
Beta = Cov(x,y)/Var(x) , Correlation = Cov(x,y)/Var(x)Var(y) =beta/var(y) , therefore Beta = Correlation * Var (y) = correlation* (Y- mean of Y)
Return on A given return of B =3%, = Mean Return + Correlation* (RB-2%) +e(e=0) , RA =2.90%
Is it correct.........???:):D
:confused:Q. Consider Stock A & B. Assume their Annual returns are jointly normally distributed. the marginal distribution of each stock has mean of 2% and standard deviation of 10% and Correlation of 0.9%. What is expected annual return of stock A if the annual return of Stock B is 3%
Ans...
In exam there are 10 questions with 5 options, if you will score 3 or more correct you will pass. What is probability that you will pass just by guessing ????
Ans: The passing rate is : 1/5 =0.2, Failing rate=4/5=0.8
Passing rate by guessing 3 or more correct questions =1- (failing by 1...
A Simple question is disturbing me.. I don't know why but need more clarifications....
Q:
is :
The correct answer is : 0.80
Please explain in details so that I can get it easily... @brian.field Please help
@ShaktiRathore ....... Instead of X*100/2 ... we may consider coupon as 50X => 50 X *(DF1+DF2+DF3+DF4) + (100+50X)DF5 =97
(as coupon for 4 half years is same 100*X/2)
DF is Discount Factor... By solving this I am getting answer X = 8.77% ........Advise me where I am wrong in my calculations...
John Hull 4.33. Portfolio A consists of a 1-year zero-coupon bond with a face value of $2,000 and a
10-year zero-coupon bond with a face value of $6,000. Portfolio B consists of a 5.95-year
zero-coupon bond with a face value of $5,000. The current yield on all bonds is 10% per
annum.
(a) Show...
hi @David Harper CFA FRM how to calculate value of N(d1) if d1=0.74644 without rounding off, as per my knowledge and idea it should beb N(0.74)+0.644((N(0.75)-N(0.74)) = 0.7704+0.644(0.7734-0.7704) = 0.772332 but in book correct value is given 0.7731. I don't know where I am wrong in my...
Can you help in solving the sum step by step
A portfolio is invested equally into two funds, each with normally distributed returns. The first fund has an expected return of 6.0% with return volatility of 8.0%. The second fund has an expected return of 10.0% with return volatility of 15.0%. The...
This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
By continuing to use this site, you are consenting to our use of cookies.