Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Stock A's annual returns have a standard deviation of 31%. Stock B's annual returns have a standard deviation of 56%. The two stocks have a

Stock A's annual returns have a standard deviation of 31%. Stock B's annual returns have a standard deviation of 56%. The two stocks have a correlation of 0. Use calculus to find out what percentage of your money you should invest in Stock A in order to minimize the standard deviation of a portfolio of A and B. Go out four decimals - in other words, you should write 31.68% as .3168.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_step_2

Step: 3

blur-text-image_step3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions