Suppose you observed the following data on two securities: Mars and Venus:
You short sold 200 shares of Mars at $20 per share and purchased 400 shares of Venus at $25 per share to increase the possible return on the portfolio.The correlation between the securities is 0.30.What is the standard deviation of the portfolio?
Definitions:
Present Value
The computed present value of a future monetary sum or cash flow sequence, utilizing an established rate of return.
Growth Opportunities
Potential scenarios or plans a business can embark on to increase profits, expand its operations, or enter new markets.
Abnormal Earnings
Income that deviates significantly from what is typical or expected, usually referring to profits significantly higher or lower than those typical for the industry or the company's history.
Valuation Approach
The methodologies and procedures used to determine the value of an asset, a company, or a financial instrument.
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