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Stocks 1 and 2 are selling for $100 and $125, respectively. You own 200 shares of stock 1 and 100 shares of stock 2. The
Stocks 1 and 2 are selling for $100 and $125, respectively. You own 200 shares of stock 1 and 100 shares of stock 2. The weekly returns on these stocks have means of 0.001 and 0.0015, respectively, and standard devia- tions of 0.03 and 0.04, respectively. Their weekly returns have a correla- tion of 0.35. Find the correlation matrix of the weekly returns on the two stocks and the mean and standard deviation of the weekly returns on the portfolio.
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