Question
Suppose that investor can only invest in the following stocks: Stock A : E(Ra)=10% ; S.D(Ra)=5% Stock B : E(Rb)=7% ; S.D(Rb)=8% Corr(Ra,Rb)=0.3 Income to
Suppose that investor can only invest in the following stocks: Stock A : E(Ra)=10% ; S.D(Ra)=5%
Stock B : E(Rb)=7% ; S.D(Rb)=8%
Corr(Ra,Rb)=0.3
Income to receive from B
100,000
500,000
- An investor wants to invest in a portfolio with E(Rp) of 7%. Calculate the S.D of this portfolio.
- Your bank is offering you to invest in the following fund: E(Rfund)= 7.9% and the standard deviation is 6.2169%. Is this a good fund or bad? Explain!
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
Intermediate Microeconomics
Authors: Hal R. Varian
9th edition
978-0393123975, 393123979, 393123960, 978-0393919677, 393919676, 978-0393123968
