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) | 48.00 | $36.31 | 5.00% | 20.00% |
| Duncan Inc. (B) | 29.00 | $50.49 | 9.00% | 22.00% |
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
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To calculate the expected return for the portfolio you can use the following formula textExpected Po...
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
13th International Edition
1265533199, 978-1265533199
