Question
Stocks A and B have the following returns:(Click on the following icon in order to copy its contents into a spreadsheet.) Stock A Stock B
Stocks A and B have the following returns:(Click on the following icon
in order to copy its contents into a spreadsheet.)
Stock A | Stock B | |
1 | 0.09 | 0.05 |
2 | 0.07 | 0.02 |
3 | 0.14 | 0.04 |
4 | 0.01 | 0.02 |
5 | 0.09 | 0.02 |
a. What are the expected returns of the two stocks?
b. What are the standard deviations of the returns of the two stocks?
c. If their correlation is
0.43,
what is the expected return and standard deviation of a portfolio of
72%
stock A and
28%
stock B?
a. What are the expected returns of the two stocks?
The expected return for stock A is
enter your response here.
(Round to three decimal places.)
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