Two stocks are available The corresponding expected rates are r 1 and r 2 the corresponding variances and covariances are 1 2 , 2 2 , and 12 What percentages of total investment should be invested in each of the two stocks to minimize the total variance of the rate of return of the resulting portfo...

Twoasset portfolio Consider two risky assets with known mean R 1 and R 2 variances 2 1 2 2 of the ex ...

Two stocks are available. The corresponding expected rates are r 1 and r 2 ; the corresponding

Question:

Two stocks are available. The corresponding expected rates are r₁ and r₂; the corresponding variances and covariance’s are σ₁², σ₂², and σ₁₂. What percentages of total investment should be invested in each of the two stocks to minimize the total variance of the rate of return of the resulting portfolio? What is the mean rate of return of this portfolio?

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...