Question
Consider two high-risk stocks, X and Y. The expected return on stock Y is 16%, with a standard deviation of 13%. The expected return on
Consider two high-risk stocks, X and Y. The expected return on stock Y is 16%, with a standard deviation of 13%. The expected return on stock X is 20%, with a standard deviation of 25%.
The correlation between the returns of X and Y is + 0.3.
What is the expected return and standard deviation of 40% of Y investment and 60% of the portfolio of X investment?
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
7th Edition
0357442040, 978-0357442043
