Shirley Johnson, portfolio manager, has asked you to analyze a newly acquired portfolio to determine its mean value and variability The portfolio consists of 50 shares of Xylophone Music and 40 shares of Yankee Workshop Analysis of past history indicates that the share price of Xylophone Music has ...

a Compute the mean and variance of the portfo ...

Shirley Johnson, portfolio manager, has asked you to analyze a newly acquired portfolio to determine its mean

Question:

Shirley Johnson, manager, has asked you to analyze a newly acquired to determine its mean value and variability. The consists of 50 shares of Xylophone Music and 40 shares of Yankee Workshop. Analysis of past history indicates that the share price of Xylophone Music has a mean of 25 and a variance of 121. A similar analysis indicates that Yankee has a mean share price of 40 with a variance of 225. Your best evidence indicates that the share prices have a correlation of + 0.5.
a. Compute the mean and variance of the Suppose that the correlation between share prices was actually -0.5. Now what are the mean and variance of the Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...