Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

a. What are the expected returns of the two stocks? The expected return for stock A is _____. (Round to three decimal places.) The expected

image text in transcribed

a. What are the expected returns of the two stocks?

The expected return for stock A is _____. (Round to three decimal places.)

The expected return for stock B is _____. (Round to three decimal places.)

b. What are the standard deviations of the returns of the two stocks?

The standard deviation of the return for stock A is _____. (Round to four decimal places.)

The standard deviation of the return for stock B is _____. (Round to four decimal places.)

c.. If their correlation is 0.43, what is the expected return and standard deviation of a portfolio of 80% stock A and 20% stock B?

The expected return for the portfolio is ____. (Round to four decimal places.)

The standard deviation of the return for the portfolio is ____. (Round to four decimal places.)

Stocks A and B have the following returns: Stock A 1 0.09 2 0.06 3 0.15 4 -0.02 5 0.07 Stock B 0.04 0.04 0.03 0.01 -0.03

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

Electronic Waste An Actual Gold And Silver Mine

Authors: Antonio Alcivar

1st Edition

979-8367641059

More Books

Students also viewed these Finance questions