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The Space Bank wants to open a new branch in a distance city with very different economic conditions. Currently, the bank has an expected return
The Space Bank wants to open a new branch in a distance city with very different economic conditions. Currently, the bank has an expected return of 15% with a standard deviation of 7%. The new branch is expected to have a return of 20% with a standard deviation of 10%. The correlation between the bank and the new branch is 3. The new branch is expected to be 5% of the bank's revenues. What is the standard deviation of this bank if they add the new branch? 6.82% 5.66% 6.08% 6.95%
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