Answered step by step
Verified Expert Solution
Question
1 Approved Answer
expected return for portfolio and standard deviation of portfolio Stocks A and B have the following returns: 1 2 3 4 5 Stock A 0.09
expected return for portfolio and standard deviation of portfolio
Stocks A and B have the following returns: 1 2 3 4 5 Stock A 0.09 0.06 0.14 -0.04 0.08 Stock B 0.06 0.04 0.05 0.02 -0.04 a. What are the expected returns of the two stocks? b. What are the standard deviations of the returns of the two stocks? c. If their correlation is 0.47, what is the expected return and standard deviation of a portfolio of 77% stock A and 23% stock B? a. What are the expected returns of the two stocks? The expected return for stock Ais 066. (Round to three decimal places.) The expected return for stock Bis .026. (Round to three decimal places.) b. What are the standard deviations of the returns of the two stocks? The standard deviation of the return for stock Ais .0662. (Round to four decimal places.) The standard deviation of the return for stock Bis .0397. (Round to four decimal places.) c. If their correlation is 0.47, what is the expected return and standard deviation of a portfolio of 77% stock A and 23% stock B? The expected return for the portfolio is (Round to four decimal places.) Enter your answer in the answer box and then click Check Answer. 1 part remaining Clear All MacBook PI 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