Question
Eric Poppovich invests money in two stocks for the upcoming year. His investment is shown below: STOCK: # of shares Price Per Share Expected Return
Eric Poppovich invests money in two stocks for the upcoming year. His investment is shown below:
| STOCK: | # of shares | Price Per Share | Expected Return | Standard Deviation |
|---|---|---|---|---|
| LBJ Corporation (A) | 45.00 | $38.04 | 5.00% | 19.00% |
| Duncan Inc. (B) | 28.00 | $50.44 | 10.00% | 23.00% |
The correlation between LBJ and Duncan is 0.50.
What is the expected return for the portfolio in the coming year?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Principles of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter
14th edition
133507696, 978-0133507690
