Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks.

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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?

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Fundamentals Of Corporate Finance

ISBN: 9780135811603

5th Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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