The following table provides historical annual returns of two stocks A and B. Years Stock A...
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The following table provides historical annual returns of two stocks A and B. Years Stock A Stock B 2018 0.4 -0.05 2019 -0.1 0.4 2020 0.35 -0.10 2021 -0.05 0.35 An investor would like to create of portfolio consisting of 30% of stock A and 70% of stock B. 1. Calculate the average portfolio return. The average portfolio return is equal to 2. Calculate the variance of the portfolio. The variance o is equal to: Note: In question 2, include 4 decimal points (0.0121, 0.0244...) 3. Calculate the portfolio risk in percentage terms. The portfolio risk is equal to %. Note: In question 3, include two decimal points 4. Did the creation of a portfolio reduce the investment risk? Explain why in the reason box. Yes ONO The following table provides historical annual returns of two stocks A and B. Years Stock A Stock B 2018 0.4 -0.05 2019 -0.1 0.4 2020 0.35 -0.10 2021 -0.05 0.35 An investor would like to create of portfolio consisting of 30% of stock A and 70% of stock B. 1. Calculate the average portfolio return. The average portfolio return is equal to 2. Calculate the variance of the portfolio. The variance o is equal to: Note: In question 2, include 4 decimal points (0.0121, 0.0244...) 3. Calculate the portfolio risk in percentage terms. The portfolio risk is equal to %. Note: In question 3, include two decimal points 4. Did the creation of a portfolio reduce the investment risk? Explain why in the reason box. Yes ONO
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