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Stock S has a beta of 1.6 and the standard deviation of its returns is 22% . Stock T has a beta of 0.4 and

Stock

S

has a beta of 1.6 and the standard deviation of its returns is

22%

. Stock

T

has a beta of 0.4 and the standard deviation of its returns is

32%

.. The market risk premium is

6.0%

and the risk-free rate is

5.0%

. What is the standard deviation for a portfolio equally invested in stock

T

and the risk-free asset?\

8%

\

16%

\

2.56%

\

6.2%
image text in transcribed
Stock S has a beta of 1.6 and the standard deviation of its returns is 22%. Stock T has a beta of 0.4 and the standard deviation of its returns is 32%. The market risk premium is 6.0% and the risk-free rate is 5.0%. What is the standard deviation for a portfolio equally invested in stock T and the risk-free asset? 8% 16% 2.56% 6.2%

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