Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Stock A has an expected return of 8% and a standard deviation of 20%. Stock B has an expected return of 13% and a standard
Stock A has an expected return of 8% and a standard deviation of 20%. Stock B has an expected return of 13% and a standard deviation of 30%. There is no risk-free asset. The correlation between A and B is 0.35. If the portfolio is made up of 75% of Stock A \& 25% of Stock B, what is the expected return of the portfolio? Enter your response as a regular percentage rate, rounded to two decimal places. Do not enter dollar signs, percent signs, or commas. For example, if you calculated the decimal 0.04891, you would enter for your answer, 4.89. Or if you calculated 12.56841\%, you would enter 12.57
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started