Question
Jack has a portfolio with two stocks ABC and XYZ with the following parameters: $ Invested Expected Return Standard Deviation of Return ABC $4000 4.45%
Jack has a portfolio with two stocks ABC and XYZ with the following parameters:
$ Invested Expected Return Standard Deviation of Return
ABC $4000 4.45% 8.23%
XYZ $6000 7.96% 9.76%
The correlation coefficient between ABC and XYZ is 0.40
A. Compute expected return of the portfolio. 6.556%
B. Calculate covariance of ABC and XYZ stock. 32.1299
C. Compute the standard deviation of the portfolio. ??????????? Not sure how to solve this one.
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Principles of Finance
Authors: Scott Besley, Eugene F. Brigham
5th edition
1111527369, 978-1111527365
