Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A portfolio is composed of two stocks, A and B . Stock A has a standard deviation of return of 2 4 % , while

A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 24%, while stock B has a standard deviation of return of 18%. Stock A comprises 60% of the portfolio, while stock B comprises 40% of the portfolio. If the variance of return on the portfolio is 0.041, the correlation coefficient between the returns on A and B is q, Please report your answer to 5 decimal places (1.2345)
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

Step: 3

blur-text-image

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

Financial Institutions Management

Authors: Anthony Saunders

1st Edition

0256110565, 9780256110562

More Books

Students also viewed these Finance questions

Question

Explain the process of valuing inventory at year-end.

Answered: 1 week ago

Question

10. Describe the relationship between communication and power.

Answered: 1 week ago