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You wish to combine two stocks, Encor and Maestro, into a portfolio with an expected return of 16.8 percent. The expected return of Encor is
You wish to combine two stocks, Encor and Maestro, into a portfolio with an expected return of 16.8 percent. The expected return of Encor is 2.8 percent with a standard deviation of 1 percent. The expected return of Maestro is 26.6 percent with a standard deviation of 10.8 percent. The correlation between the two stocks is 0.4. What is the composition (weights) of the portfolio? (Round answer to 4 decimal places, eg. 14.5125%.) Weight in Encor % Weight in Maestro % What is the portfolio standard deviation? (Round intermediate calculations to 7 decimal places, e.g. 0.5125129 and the final answer to 4 decimal places, eg. 14.5125%.) Standard deviation %
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