You invest $20,000 in stock A and $80,000 in stock B. Suppose Stock A and B...
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You invest $20,000 in stock A and $80,000 in stock B. Suppose Stock A and B have expected returns (μ) and standard deviations (6) shown below, with a correlation coefficient of 0.4. Stock A Stock B μ 0.07 0.10 0 0.11 0.30 1) What is the expected return on your portfolio? (4 pts.) 2) Calculate the standard deviation of your portfolio. (4 pts.) You invest $20,000 in stock A and $80,000 in stock B. Suppose Stock A and B have expected returns (μ) and standard deviations (6) shown below, with a correlation coefficient of 0.4. Stock A Stock B μ 0.07 0.10 0 0.11 0.30 1) What is the expected return on your portfolio? (4 pts.) 2) Calculate the standard deviation of your portfolio. (4 pts.)
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Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1305637108
6th edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
Posted Date:
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