Question
Suppose that you want to create a portfolio that consists of a corporate bond fund, X, and a common stock fund, Y. For a $1,000
Suppose that you want to create a portfolio that consists of a corporate bond fund, X, and a common stock fund, Y. For a $1,000 investment, the expected return for X is $75 and the expected return for Y is $ 90 The variance for X is 1,725 and the variance for Y is 12,225. The covariance of X and Y is 4,583.
a. The portfolio risk is $
b. Compute the portfolio expected return and portfolio risk if you put $ 500 in each fund.The portfolio expected return is
(Type an integer or a decimal.)
The portfolio risk is
(Round to two decimal places as needed.)
c. Compute the portfolio expected return and portfolio risk if you put $600 in the corporate bond fund and $400 in the common stock fund.The portfolio expected return is
(Type an integer or a decimal.)
The portfolio risk is
(Round to two decimal places as needed.)
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