M. Grandet has invested 60 percent of his money in share A and the remainder in share

Question:

M. Grandet has invested 60 percent of his money in share A and the remainder in share B. He assesses their prospects as follows:

a. What are the expected return and standard deviation of returns on his portfolio?

b. How would your answer change if the correlation coefficient was 0 or _.5?

c. Is M. Grandet's portfolio better or worse than one invested entirely in share A, or is it not possible tosay?

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...