Question
Question 4 Unsaved Forever Savings Bank estimates that building a new branch office in the newly developed Washington township will yield an annual expected return
Question 4 Unsaved Forever Savings Bank estimates that building a new branch office in the newly developed Washington township will yield an annual expected return of 0.08 with an estimated standard deviation of 0.10 percent. The banks marketing department estimates that cash flows from the proposed Washington branch will be mildly positively correlated (with a correlation coefficient of + 0.26) with the banks other sources of cash flow. The expected annual return from the banks existing facilities and other assets is 0.11 with a standard deviation of 0.09. The branch will represent just 0.10 of Lifetimes total assets. What will be Forevers overall standard deviation of returns after this branch is added? (Enter your answer as a number with 4 decimal places, e.g. 0.1111. DO NOT ENTER THE ANSWER AS A PERCENTAGE)
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