Question
Consider the following six months of returns for two stocks and a portfolio of those two stocks: LOADING... (Click the icon to view the monthly
Consider the following six months of returns for two stocks and a portfolio of those two stocks: LOADING... (Click the icon to view the monthly returns.) Note: The portfolio is composed of 50% of Stock A and 50% of Stock B.
Monthly Returns
| Jan | Feb | Mar | Apr | May | Jun |
| |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Stock A | 1% | 4% | 7% | 2% | 3% | 3% | |||||||
| Stock B | 1% | 4% | 7% | 2% | 3% | 3% | |||||||
| Portfolio | 0% | 0% | 0% | 0% | 0% | 0% | |||||||
PrintDone
a. What is the expected return and standard deviation of returns for each of the two stocks?
b. What is the expected return and standard deviation of returns for the portfolio?
c. Is the portfolio more or less risky than the two stocks? Why?
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Enhancing Financial Inclusion Through Islamic Finance Volume II
Authors: Abdelrahman Elzahi Saaid Ali , Khalifa Mohamed Ali , Mohamed Hassan Azrag
1st Edition
3030399389,3030399397
