Your eccentric Aunt Claudia has left you $50,000 in BP shares plus $50,000 cash. Unfortunately, her will requires that the BP stock not be sold for one year and the $50,000 cash must be entirely invested in one of the stocks shown below. BHP Agricultural Billiton BP Siemens Nestlé Sony Sanofi Bank BHP Billiton 1.00 0.34 0.05 0.37 0.55 0.47 0.44 BP 1.00 0.34 0.16 0.14 0.31 0.12 Siemens 1.00 0.09 0.10 0.02 0.10 Nestlé 1.00 0.33 0.51 0.06 Sony 1.00 0.20 0.30 Sanofi 1.00 0.31 Agricultural Bank 1.00 Standard deviation (%) 23.60 27.90 9.09 17.20 26.70 29.50 24.80 a. Calculate the portfolio variance for seven different portfolios. Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a decimal rounded to 5 places. b. What is the safest attainable portfolio under these restrictions?

Your eccentric Aunt Claudia has left you $50,000 in BP shares plus $50,000 cash. Unfortunately, her will requires that the BP stock not be sold for one year and the $50,000 cash must be entirely invested in one of the stocks shown below. BHP Agricultural Billiton BP Siemens Nestlé Sony Sanofi Bank BHP Billiton 1.00 0.34 0.05 0.37 0.55 0.47 0.44 BP 1.00 0.34 0.16 0.14 0.31 0.12 Siemens 1.00 0.09 0.10 0.02 0.10 Nestlé 1.00 0.33 0.51 0.06 Sony 1.00 0.20 0.30 Sanofi 1.00 0.31 Agricultural Bank 1.00 Standard deviation (%) 23.60 27.90 9.09 17.20 26.70 29.50 24.80 a. Calculate the portfolio variance for seven different portfolios. Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a decimal rounded to 5 places. b. What is the safest attainable portfolio under these restrictions?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section: Chapter Questions

Problem 2P

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