Assume you have an investment portfolio with two investments: GRACE stocks and SCOTIA stocks. The portfolio has
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Question:
- Assume you have an investment portfolio with two investments: GRACE stocks and SCOTIA stocks. The portfolio has 60% invested in SCOTIA stocks and the remaining 40%% invested in GRACE stocks. The expected return, standard deviation, and correlation of the investments are shown are shown in the table below.
Security | Standard deviation | Return |
GRACE | 8% | 17% |
SCOTIA | 13% | 24% |
Correlation = 0.2 |
Using the information provided to calculate the expected return and the standard deviation on the portfolio.
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