Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Im not very apt at doing thisd question You wish to combine two stocks, Encor and Maestro, into a portfolio with an expected return of

Im not very apt at doing thisd question

image text in transcribed
You wish to combine two stocks, Encor and Maestro, into a portfolio with an expected return of 16.4 percent. The expected return of Encor is 2.4 percent with a standard deviation of 1 percent. The expected return of Maestro is 25.8 percent with a standard deviation of 10.4 percent. The correlation between the two stocks is 0.4. What is the composition (weights) of the portfolio? (Round answer to 4 decimal places, e.g. 14.5125%.) Weight in Encor % Weight in Maestro What is the portfolio standard deviation? (Round intermediate calculations to 7 decimal places, e.g. 0.5125129 and the final answer to 4 decimal places, e.g. 14.5125%.) Standard deviation %

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

Forecasting Methods And Applications

Authors: Spyros G. Makridakis, Steven C. Wheelwright, Rob J Hyndman

3rd Edition

0471532339, 9780471532330

More Books

Students also viewed these Finance questions

Question

=+ How does the name reflect the mission of the organisation?

Answered: 1 week ago

Question

Factor the given polynomial. 10x - 23x-5

Answered: 1 week ago

Question

14. Now reconcile what you answered to problem 15 with problem 13.

Answered: 1 week ago