Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Find standard deviation for Stock A and Stock B, and which one I should add, Thank you! You have a portfolio with a standard deviation

image text in transcribed

Find standard deviation for Stock A and Stock B, and which one I should add, Thank you!

You have a portfolio with a standard deviation of 30% and an expected return of 18%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 25% of your money in the new stock and 75% of your money in your existing portfolio, which one should you add? Standard Deviation Expected Return 12% 12% Correlation with Your Portfolio's Returns 0.4 0.5 Stock A Stock B 22% 17% Standard deviation of the portfolio with stock A is %. (Round to two decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Competing On Analytics The New Science Of Winning

Authors: Thomas H Davenport, Jeanne G Harris, Gary Loveman

1st Edition

1422103323, 9781422103326

More Books

Students also viewed these Finance questions

Question

Dont smell (i.e., too much perfume/cologne).

Answered: 1 week ago

Question

What was the positive value of Max Weber's model of "bureaucracy?"

Answered: 1 week ago