A hedge fund has created a portfolio using just two stocks. It has shorted $38,000,000...
60.1K
Verified Solution
Link Copied!
Question
Finance
A hedge fund has created a portfolio using just two stocks. It has shorted $38,000,000 worth of Oracle stock and has purchased $86,000,000 of Intel stock. The correlation between Oracle's and Intel's returns is 0.66. The expected returns and standard deviations of the two stocks are given in the following table: Suppose the correlation between Intel and Oracle's stock increases, but nothing else changes. Would the portfolio be more or less risky with this change? (Select the best choice below.) A. Cannot say without knowing how investors trade off expected return and volatility. B. More risky. C. Less risky. D. Riskiness of the portfolio stays the same. Data table (Click on the following icon in order to copy its contents into a spreadsheet.)
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.