Question
Stock A: E (R) = 9%, STD DEVIATION =36% Stock B : E (R) = 15%, STD DEVIATION =62% 1. Calculate the expected return of
Stock A: E (R) = 9%, STD DEVIATION =36%
Stock B : E (R) = 15%, STD DEVIATION =62%
1. Calculate the expected return of a portfolio that is composed of 35% of a stock A and 65% of stock B
2. calculate the std deviation of this portfolio when the correlation coefficient between the returns is 0.5
3. calculate the std deviation of this portfolio same weights in each stock when the correlation coefficient is now -0.5
4. how did the changes in the correlation between the returns on A and B affect the std deviation of the portfolio?
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Routledge Handbook Of Social And Sustainable Finance
Authors: Othmar M. Lehner
1st Edition
1138343773, 978-1138343771
