Question
Stock 1 has an expected annual return of 6% and a standard deviation of 27%. Stock 2 has an expected annual return of 10%
Stock 1 has an expected annual return of 6% and a standard deviation of 27%. Stock 2 has an expected annual return of 10% and a standard deviation of 15%. Their correlation is 0.58. You invest 20% in stock 1 and 80% in stock 2. Part 1 What is the expected return of the portfolio? 3+ decimals Submit Part 2 What is the standard deviation of the portfolio? 3+ decimals Submit Attempt 1/10 for 10 pts. Attempt 1/10 for 10 pts. Attempt 1/10 for 10 pts. Part 3 What is the highest annual return among the lowest returns that occur with a probability of 5% (5% VaR)?
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Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
6th edition
1305637100, 978-1305637108
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