Question
You have one share of Sierra stock and one share of Tango stock in a portfolio. Both are equally priced. Both have an expected return
You have one share of Sierra stock and one share of Tango stock in a portfolio. Both are equally priced. Both have an expected return of 6% and both have a standard deviation of returns of 2%. The returns of the two stocks are not perfectly correlated. Which of the following statements is true about this two-stock portfolio?
A. | The portfolio expected return is not 6% and the portfolio standard deviation is 2%. | |
B. | The portfolio expected return is not 6% and the portfolio standard deviation is not 2%. | |
C. | Answer is not possible or not listed | |
D. | The portfolio expected return is 6% and the portfolio standard deviation is not 2%. | |
E. | The portfolio expected return is 6% and the portfolio standard deviation is 2%. |
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