# Question: You are interested in using short selling to increase the

You are interested in using short selling to increase the possible returns from your portfolio.19 you have short sold $200 of ABC and invested $1,200 in DEF. The following data are available on ABC and DEF:

The correlation between ABC and DEF is 0.4. Calculate the expected return and standard deviation of the portfolio. (Hint: The total invested is $1,000, and while individual weights can be greater than one or less than zero, the sum of the weights must still beone.)

The correlation between ABC and DEF is 0.4. Calculate the expected return and standard deviation of the portfolio. (Hint: The total invested is $1,000, and while individual weights can be greater than one or less than zero, the sum of the weights must still beone.)

**View Solution:**## Answer to relevant Questions

Using the following information, calculate the expected return and the standard deviation ofABC.You are interested in two stocks: Alcon and Beldon. Both stocks have an expected return of 8 percent. The standard deviation of Alcon is 3 percent, and the standard deviation of Beldon is 5 percent. You want the weights to ...State three of the most important assumptions underlying Markowitzâ€™s notion of efficient portfolios.For the following decisions, indicate if they are consistent with risk aversion or risk loving.a. Buying a lottery ticketb. Buying fire insurance on your housec. Jaywalking on St. Catherine Street in Montreald. Backing up ...Stock FM has a standard deviation of 25 percent and a correlation coefficient of 0.6 with market returns. The standard deviation of market return is 20 percent, and the expected return is 16 percent. The risk-free rate is ...Post your question