Question
Mr Wealthy decided to invest equally in portfolio C and portfolio Z (without increasing his capital for investment). Assuming that the returns to the two
Mr Wealthy decided to invest equally in portfolio C and portfolio Z (without increasing his capital for investment). Assuming that the returns to the two assets C and Z are perfectly positively correlated, calculate the expected return and the standard deviation to the new portfolio. (Hint, what is your absolute answer if weightages in Z and C are 0.5 each?)
- Both expected return rate (E(Ri)) and standard deviation (SD(i)) are NOT given in the question.
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Fixed Income Securities Tools For Todays Markets
Authors: Bruce Tuckman, Angel Serrat
3rd Edition
0470891696, 978-0470891698
