3. (Basic two-stock statistics) You have $500 to invest. You decide to split it into two parts....
Question:
3. (Basic two-stock statistics) You have $500 to invest. You decide to split it into two parts. The return on each $250 will be determined by a coin toss, and the results of the two tosses are not correlated. If the coin comes up heads, the investment will return 10%, and if it comes up tails, it will return – 10%.
What is the average return, the return variance, and the return standard deviation of this investment?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Principles Of Finance With Excel
ISBN: 9780190296384
3rd Edition
Authors: Simon Benninga, Tal Mofkadi
Question Posted: