Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You are creating a portfolio of two stocks. Pear Inc. has expected return of 15% and standard deviation of 30%. InstaCafe Inc. has expected return
You are creating a portfolio of two stocks. Pear Inc. has expected return of 15% and standard deviation of 30%. InstaCafe Inc. has expected return of 12% and standard deviation of 40%. The two stocks' covariance is 0.036 and the risk free rate is 2%.
What percentage of the Optimal Risky Portfolio will be invested in Pear Inc?
Provide your answer in percent rounded to two decimals, omitting the % sign.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started