Big trucks Plc has two shares X and Y. the following information regarding expected returns and...
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Big trucks Plc has two shares X and Y. the following information regarding expected returns and standard deviations of these share are given. Rx = 25%, Ry = 35%, 0x = 15%, y = 20% A. What is the expected return and standard deviation for a portfolio composed of 50% of Y assuming X and Y have a correlation of -0.7? (10 marks) B. What is the expected return and standard deviation for a portfolio composed of 30% of X and 70% of Y, assuming X and Y have a correlation of +0.5? (10 marks) Big trucks Plc has two shares X and Y. the following information regarding expected returns and standard deviations of these share are given. Rx = 25%, Ry = 35%, 0x = 15%, y = 20% A. What is the expected return and standard deviation for a portfolio composed of 50% of Y assuming X and Y have a correlation of -0.7? (10 marks) B. What is the expected return and standard deviation for a portfolio composed of 30% of X and 70% of Y, assuming X and Y have a correlation of +0.5? (10 marks)
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Step 11 A Expected return Rp 05wYRY 05wXRX Rp 0535 05 25 Rp 30 Standard Deviation Op SQRT ... View the full answer
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