Question
You have formed a portfolio comprised of Stock A and Stock B. The expected return and standard deviation for Stock A are 2.5% and 12.8%
You have formed a portfolio comprised of Stock A and Stock B. The expected return and standard deviation for Stock A are 2.5% and 12.8% respectively. The expected return and standard deviation for Stock B are 3.3% and 7% respectively. The correlation between the two stocks is 0. Answer the following questions.
What is the expected return on a portfolio comprised of 30% Stock A and 70% stock B?
A. 2.98%
B. 2.5%
C. 3.3%
D. none of the other choices is correct.
What is the standard deviation for the same portfolio (30% in Stock A and 70% in Stock B)?
A. none of the other choices is correct
B. 6.2254%
C. 9.9%
D. 0.3876%
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