Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

What is the standard deviation? Application: Mutual Fund Return Let XA and X, be the returns of stocks A and B. E[X] = 10 (%)

What is the standard deviation? image text in transcribed

Application: Mutual Fund Return Let XA and X, be the returns of stocks A and B. E[X] = 10 (%) and Var[X2] = 9 (%2) (Stdev[X2]= 3 %) E[X3] = 20 (%) and Var[X2] = 25 (%2) (Stdev[X2]= 5 %) For now, assume returns are independent. (2) What is the standard deviation of the return, Stdev[R]? Var[R] = Var[0.5X+ 0.5XB]= (0.5). Vor(Xa) +(655. Vorlxg). Stdev[R]= What hannene if X and Y are not independent? 25:36 / 38:12 20 000 F DOO F 15 # 3 2 $ 4 % 5 & 7 6 8 9 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

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

Get Started

Students also viewed these Finance questions