Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The expected return of Stock A is 20% and the expected return of stock B is 15%. The standard deviation of Stock A is 44.721%

The expected return of Stock A is 20% and the expected return of stock B is 15%. The standard deviation of Stock A is 44.721% and the standard deviation of Stock B is 38.730%. If you invest in 2000 shares of Stock A with a share price of $50 and 4000 shares of Stock B with a share price of $10.

  1. What is the volatility of the portfolio if the correlation is -1? ( 5 points)

  1. What is the volatility of the portfolio if the correlation is +1? (5 points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Ultimate Guide O Futures Rading

Authors: Josh Luberisse

1st Edition

979-8374817393

More Books

Students also viewed these Finance questions

Question

Understand the five stages of capital budgeting for a project

Answered: 1 week ago