Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have a portiolo with a stand deviation of 21% and an expected retum of 19% You are considering adding one of the two stocks

image text in transcribed
image text in transcribed
You have a portiolo with a stand deviation of 21% and an expected retum of 19% You are considering adding one of the two stocks in the following table after adding the stock you will have 25% of your money in the ww stock and 75% of your money in your existing portiolo which one should you add? Expected Standard Correlation with Return Deviation Your Portfolio's Returns 12-18 (Similar to) Stock A Stock B Expected Return 12% 12% Standard Deviation 24% 19% Correlation with Your Portfolio's Returns 0.4 0.7 Standard deviation of the portfolio with stock A is % (Round to two decimal places)

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

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

Recommended Textbook for

Corporate Finance Principles And Practice

Authors: Denzil Watson, Antony Head

5th Edition

0273725343, 978-0273725343

More Books

Students also viewed these Finance questions