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every stock is the same, it is 50/50 the return will yield 20% or -10%. Should have all the info you need to answer 1.
every stock is the same, it is 50/50 the return will yield 20% or -10%. Should have all the info you need to answer
1. There are 100 stocks whose returns have the same distribution: With probability 50%, the return is 20% and with probability 50%, the return is -10%. You decide to build an equally weighted portfolio. a. What is your portfolio's expected return? b. If all stock returns are independently distributed, what is the standard deviation of your portfolio's return? c. If all stock returns are perfectly correlated, what is the standard deviation of your portfolio's return Step by Step Solution
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