Question 1

Arbor Systems and Gencore stocks both have a volatility of 37%.Compute the volatility of a portfolio with50%invested in each stock if the correlation between the stocks is -0.1.

The volatility of the portfolio is _______%.

Question 2

Suppose that Google stock has a beta of 1.07 and Boeing stock has a beta of 1.36. If the risk free interest rate is 4% and the expected return from the market portfolio is 11%, then the expected return on a portfolio that consists of 30% Google stock and 70% Boeing stock is _____%.

Question 3

Suppose you invest $15,000 in Merck stock and $25,000 in Home Depot stock. You expect a return of 18% for Merck and 19% for Home Depot. The expected return on your portfolio is _______%