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Chapter 5 See chart Security Covariances A B C D A B C D E(R) 14% 16% 12% 13% A 0.766 0.315 0.236 0.249 o² 0.766 0.735 0.563 0.353 B 0.315 0.735 0.270 0.285 B 1.050 1.200 0.900 0.950 C 0.236 0.270 0.563 0.214 D 0.249 0.285 0.214 0.353 2. .)Calculate the proportions of Security A and security B that represent the minimum variance portfolio. )What is the beta of an equally weighted portfolio of all four securities? 4.) Assuming unsystematic risk equal to zero and a market variance of 0.25 what is the variance of the portfolio in problem 3? Chapter 6 1.)Suppose you split your money 50-50 between the two securities shown in table 6-12. )What is the expected return of the two securities portfolio? b.)What is the portfolio beta? 1.) In problem 1,what is the covariance between Security A and the market? See chart Security Security A 13% E(Ã) 12% 0.029 0.021 1.20 o 1.10 Beta /ariance of the market 0.0002;PAR 0.6. 3. What is the portfolio variance in problem 1? 4. )Suppose you split your money between securities A and B from problem 1. What percentage of your portfolio variance comes from the interaction component of total risk? Chapter 7 1.) The current exchange rate in one U.S dollar equal to 1.4456 units of currency G. In the United States the T-bill rate is 8,68 percent. The 60 -day forward rate for currency G is $ 0.7100/What country G interest rate is implied in these prices? 4. )Suppose a Canadian dollar costs 75 cents in US money. If the market begins in equilibrium what should the new exchange rate be if US inflation is 1 percent higher than Canadian inflation ? 6.) You have Y1,000,000 in bonds that will mature in 90 days. Using current data from the wall street journal, show how you can hedge the foreign exchange risk by doing the following .uusing forward market. .Jusing futures market

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