The expected return on Big Time Toys is 9% and its standard deviation is 20%. The expected

Question:

The on Big Time Toys is 9% and its standard deviation is 20%. The on Chemical Industries is 8% and its standard deviation is 25%.
a. Suppose the correlation coefficient for the two stocks' returns is .2. What are the and standard deviation of a with 30% invested in Big Time Toys and the rest in Chemical Industries?
b. If the correlation coefficient is .7, recalculate the and standard deviation, assuming the weights are unchanged.
c. Explain the difference between your answers to (a) and (b).
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...