Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

18. A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 5% and a return

image text in transcribed 

18. A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 5% and a return of 4% while stock B has a standard deviation of return of 15% and a return of 6%. The correlation coefficient between the returns on A and B is .5. Stock A comprises 40% of the portfolio while stock B comprises 60% of the portfolio. The return on the portfolio is 18. A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 5% and a return of 4% while stock B has a standard deviation of return of 15% and a return of 6%. The correlation coefficient between the returns on A and B is .5. Stock A comprises 40% of the portfolio while stock B comprises 60% of the portfolio. The return on the portfolio is

Step by Step Solution

3.42 Rating (152 Votes )

There are 3 Steps involved in it

Step: 1

Calculating the Portfolio Return To calculate the portfolio return we can follow these ste... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516

More Books

Students also viewed these Finance questions

Question

What would be the consequence of not accounting for inflation?

Answered: 1 week ago