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Suppose the current T-bill rates is 5%, the expected return for stock A is 15%, with a standard deviation of 15%, the expected return for
Suppose the current T-bill rates is 5%, the expected return for stock A is 15%, with a standard deviation of 15%, the expected return for a real estate asset is 10%, with a standard deviation of 10%. Correlation between stocks and real estate is 25%. If we borrow $1 at the risk-free rate, and invest $2 in the risky mixed asset portfolio. What is the expected return and risk? Is the expected return (-1 x 5%) + (2 x 0.125)?
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