Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Two stocks (A and B) have a covariance of 23. When combined in equal proportions into portfolio Y, the variance of the portfolio is 30.25.

Two stocks (A and B) have a covariance of 23. When combined in equal proportions into portfolio Y, the variance of the portfolio is 30.25. Stock A has a variance twice that of Stock B. Another portfolio (X) has an expected return of 17% and a variance of 50.

Additional Information

The expected return on the market is 15% and the risk free rate is 7%

Covariance (A,Market) = 22 and Covariance (B,Market) = 15.5

Variance of the Market is 15

What is Variance of Stock A?

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

Investment Science

Authors: David G. Luenberger

2nd Edition

0199740089, 978-0199740086

More Books

Students explore these related Finance questions