Question
An investor forms a portfolio of two stocks, Alpha and Beta. Information regarding the two stocks is shown below: STOCK: Expected Return Standard Deviation Alpha
An investor forms a portfolio of two stocks, Alpha and Beta. Information regarding the two stocks is shown below:
| STOCK: | Expected Return | Standard Deviation |
| Alpha | 8.00% | 25.00% |
| Bravo | 9.00% | 40.00% |
The correlation between returns on Alpha and Bravo is 0.50. The investor will put 80% of her wealth in Alpha and the 20% of her wealth in Bravo.
What is the standard deviation of the investors portfolio?
Question 14 options:
| 29.41% | |
| 24.98% | |
| 27.33% | |
| 28.48% | |
| 22.95% |
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Personal Finance For Dummies
Authors: Eric Tyson
9th Edition
1119517893, 978-1119517894
