Let the expected returns of A and B be equal to 09 and ErB, respectively Also, suppose that the standard deviations are A 04 and B 10, and the two securities are perfectly positively correlated Find ErB if the return of a riskless portfolio composed of A and B is 05 ...

Calculation of rate of return on Er B Wh ...

Let the expected returns of A and B be equal to .09 and ErB, respectively. Also, suppose

Question:

Let the expected returns of A and B be equal to .09 and ErB, respectively. Also, suppose that the standard deviations are σA =.04 and σB =.10, and the two securities are perfectly positively correlated. Find ErB if the return of a riskless composed of A and B is .05.

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...