A portfolio is composed of two stocks, A and B. Stock A has anexpected return of 12% while stock B has an expected return of 15%. Stock A has a standard deviation of return of 5% while stock B has a standard deviation of return of 15%. The correlation coefficientbetween the returns on A and B is 0.8. Stock A comprises 30% of the portfolio while stock B comprises 70% of the portfolio.

-Find the expected return for the portfolio

-Find the variance of the portfolio

please write out the formulas and show work

Answer rating: 100% (QA)

To find the expected return and variance of the portfolio we can use the following formulas 1 Expect... View the full answer