Question
Olivia has a portfolio of two risky assets: a stock fund and a bond fund. The stock fund has an expected return of 22%, while
Olivia has a portfolio of two risky assets: a stock fund and a bond fund. The stock fund has an expected return of 22%, while the bond fund returns 8%. The standard deviations for the stock and bond funds are 17% and 12%, respectively. The covariance between the stocks is 0.00147. What is the standard deviation of this portfolio, given she invest 47% in the stock fund?
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Foundations Of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
17th Edition
126001391X, 978-1260013917
