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please provide me with the correct answers and also show your work please. You are considering investing in two securities, X and Y. The following
please provide me with the correct answers and also show your work please.
You are considering investing in two securities, X and Y. The following data are available for the two securities: Security X Security Y 0.12 Expected return 0.04 Standard deviation of returns 0.08 0.07 Beta 1.40 0.70 Round your answers to two decimal places. a. If you invest 40 percent of your funds in Security X and 60 percent in Security Y and if the correlation of returns between X and Y is +0.5, compute the following: i. The expected return from the portfolio: % ii. The standard deviation of returns from the portfolio: % b. What happens to the expected return and standard deviation of returns of the portfolio in Part a if 70 percent of your funds are invested in Security X and 30 percent of your funds are invested in Security Y? i. The expected return from the portfolio: % ii. The standard deviation of returns from the portfolio: % c. What happens to the expected return and standard deviation of returns of the portfolio in Part a if the following conditions exist? i. The correlation of returns between Securities X and Y is +0.8. The expected return from the portfolio: % The standard deviation of returns from the portfolio: % ii. The correlation of returns between Securities X and Y is 0. The expected return from the portfolio: % The standard deviation of returns from the portfolio: % iii. The correlation of returns between Securities X and Y is -0.9. The expected return from the portfolio: % The standard deviation of returns from the portfolio: %Step by Step Solution
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