An investor has 800 000 TL to invest. He invests 600 000 TL in stock A...
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An investor has 800 000 TL to invest. He invests 600 000 TL in stock A which has variance of %12,5 and expected return of 0,25. He considers to invest the rest in Stock B. Stock B has variance of %25 and expected return 0,6. The correlation coefficient between A and B is 0,45. a) Calculate the expected return and standard deviation of a portfolio that includes A and B stocks. b) Is there a way to reduce systematic risk of this portfolio? If, explain briefly. An investor has 800 000 TL to invest. He invests 600 000 TL in stock A which has variance of %12,5 and expected return of 0,25. He considers to invest the rest in Stock B. Stock B has variance of %25 and expected return 0,6. The correlation coefficient between A and B is 0,45. a) Calculate the expected return and standard deviation of a portfolio that includes A and B stocks. b) Is there a way to reduce systematic risk of this portfolio? If, explain briefly.
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Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
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