Question
Portfolio P consists of two stocks: 50% is invested in Stock A and 50% is invested in Stock B. Stock A has a standard deviation
Portfolio P consists of two stocks: 50% is invested in Stock A and 50% is invested in Stock B. Stock A has a standard deviation of 25% and a beta of 1.2, and Stock B has a standard deviation of 35% and a beta of 0.80. The correlation between these stocks is 0.4.What is the standard deviation of Portfolio P?Less than 30%More than 30%
What is the beta of Portfolio P? Which stock is riskier to a diversified investor?
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Mathematics For Business
Authors: Stanley A Salzman, Charles D Miller, Gary Clendenen
8th Edition
0321357434, 9780321357434
