If Grace sells the ABC stock, she will invest the proceeds in risk-free government securities yielding .42

Question:

If Grace sells the ABC stock, she will invest the proceeds in risk-free government securities yielding .42 percent monthly. Calculate the expected return of the new portfolio, the covariance of the government security returns with the original portfolio, and the expected standard deviation of the new portfolio.

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...