Homework Chapter 8 Homework Question 7 P8 17 Simila Part 1 Of 2 Hw Score 18 18 2 Of 11 Points Points 0 Of 1 1 (84.02 KiB) Viewed 82 times
= Homework: Chapter 8 Homework Question 7, P8-17 (simila... Part 1 of 2 HW Score: 18.18%, 2 of 11 points Points: 0 of 1 Save Total, nondiversifiable, and diversifiable risk David Talbot randomly selected securities from all those listed on the New York Stock Exchange for his portfolio. He began with a single security and added securities one by one until a total of 20 securities were held in the portfolio. After each security was added, David calculated the portfolio standard deviation, The calculated values are shown in the following table: a. Plot the date from the table on a graph that has the number of securities on the x-axis and the portfolio standard deviation on the y-axis. b. Divide the total portfolio risk in the graph Intoits nondiversifiable and diversifiable risk components, and label each of these on the graph. c. Describe which of the two risk components is the relevant risk, and explain why it is relevant. How much of this risk exists in David Talbot's portfolio? a. and b. Which of the following graphs represents the portfolio nisk data given above? (Select the best answer below.) O A ОВ. a Q Q 20 18- 164 14- 12- 10 8 E 4- 2- 20 18- 18- 14 12- 101 Portfolio Risk 8 Nondiversifiable Risk Diversifiable Risk 4 2- Diversifiable Risk Nondtversiftable Risk 0 20 10 15 Number of Securities in Portfolio 0 15 Number of Securities in Portfolio Oc. OD 2017 18 16 14- 12- 은 10- !- e Portfolio Risk 201- 18 16 14- 12+ 10- 8- GDiversifiable Risk 6- Nondiversifiable Risk
= Homework: Chapter 8 Homework Question 7, P8-17 (simila.. Part 1 of 2 HW Score: 18.18%, 2 of 11 points O Points: 0 of 1 Save 1 х Total, nondiversifiable, and diversifiable risk Day securities were held in the portfolio. After each secur Data Table folio. He began with a single security and added securities one by one until a total of 20 In the following table: : a. Plot the date from the table on a graph that has th b. Divide the total portfolio risk in the graph intoits na c. Describe which of the two risk components is the (Click on the icon located on the top-right comer of the data table below in order to copy its contents into a spreadsheet) a . 15 144 124 은 10 - - 4 2 Nondiversifiable Risk Portfolio risk, 18.20% 16.50% 14.90% 13.30% 12.30% 11.50% 10.70% 10.10% 9.30% 8.60% Number of securities 1 2 3 4 5 6 7 5 9 10 Number of securities 11 12 13 14 15 16 17 18 Portfolio risk. gr. 7.70% 7.10% 6.50% 6.00% 5.70% 5.50% 5.30% 5.25% 5.20% 5.15% Diversifiable Risk Diversifible Risk Nondiversifiable Risk 20 5 10 15 Number of Securities in Portfolio 10 15 Securities in Portfolio OC 19 20 @ 20 164 16- 14 12 10 Print Done Portorok 8- E- 4- Nondiversitat Diversifiable Risk Nondiversifiable Risk 1 20 0 D 20 10 Nurrber ol Securities in Portfolio 5 10 15 Number of Securities in Portfolio
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!