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You wish to combine two stocks, Encor and Maestro, into a portfolio with an expected return of 16.2 percent. The expected return of Encor is
You wish to combine two stocks, Encor and Maestro, into a portfolio with an expected return of 16.2 percent. The expected return of Encor is 2.2 percent with a standard deviation of 1 percent. The expected return of Maestro is 25.4 percent with a standard deviation of 10.2 percent. The correlation between the two stocks is 0.4.
What is the composition (weights) of the portfolio?(Round answer to 4 decimal places, e.g. 14.5125%.)
What is the portfolio standard deviation?
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