Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks.
Question:
Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks.
a. What is the expected return and standard deviation of returns for each of the two stocks?
b. What is the expected return and standard deviation of return for the portfolio?
c. Is the portfolio more or less risky than the two stocks? Why?
Transcribed Image Text:
Stock A Stock B Portfolio Jan 2% 0% 1% Feb 5% -3% 1% Mar -6% 8% 1% Apr 3% -1% 1% May -2% 4% 1% Jun 4% -2% 1%
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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