Question
You wish to create a portfolio consisting of the stocks Rubber Duck and PeppaCow. You wish to achieve a target return of 6.43%. You
You wish to create a portfolio consisting of the stocks Rubber Duck and PeppaCow. You wish to achieve a target return of 6.43%. You have the following information for both stocks: E[r] Volatility (0) Correlation (p) Rubber Duck PeppaCow 6% 12% 8% 18% 0.71 a) Compute the portfolio weights of Rubber Duck and PeppaCow to achieve this target return! b) Compute the expected volatility of this portfolio!
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
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