The expected return of ABC is 15 percent, and the expected return of DEF is 23 percent.

Question:

The of ABC is 15 percent, and the of DEF is 23 percent. Their standard deviations are 10 percent and 23 percent, respectively, and the correlation coefficient between them is zero.
a. What is the and standard deviation of a composed of 25 percent ABC and 75 percent DEF?
b. What is the and standard deviation of a composed of 75 percent ABC and 25 percent DEF?
c. Would a risk-averse investor hold a made up of 100 percent of ABC? Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...