Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A and B are negatively correlated stocks with -0.8 correlation coefficient. The expected return of both stocks are given as follows: Weight Expected return (ri)
A and B are negatively correlated stocks with -0.8 correlation coefficient. The expected return of both stocks are given as follows:
Weight | Expected return (ri) % | Standard Deviation | |
Stock A | 80% | 30% | 8% |
Stock B | 20% | 26% | 5% |
Calculate the portfolios expected return (rp)
Select one:
a. 29.2%
b. 19%
c. 5.2%
d. 24%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started