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Cathie Wood, a fund manager at ARK, constructs a portfolio with three stocks: Apple, Amazon, and Tesla. She allocates 20% of total funds to Apple,
Cathie Wood, a fund manager at ARK, constructs a portfolio with three stocks: Apple, Amazon, and Tesla. She allocates 20% of total funds to Apple, 30% to Amazon, and the remaining 50% to Tesla. The following two tables summarize each stock's historical return and variance and covariances between stocks. Stocks Weights Return Variance Apple 20% 4.7% 0..03% Amazon 30% 8.3% 0.04% Tesla 50% 12.5% 0.07% Covariance (Apple, Amazon) 0.025% Covariance (Apple, Tesla) 0.013% Covariance (Tesla, Amazon) 0.067% 1. The portfolio return is %. (Note: round to the nearest tenth.) 2. The portfolio standard deviation is %. (Note: round to the nearest tenth.)
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