Both Starcents and Jpod have the same return standard deviation of 20 percent, and Starcents and Jpod
Question:
Both Starcents and Jpod have the same return standard deviation of 20 percent, and Starcents and Jpod returns have a correlation of −1. You invest half your funds in Starcents and the other half in Jpod. What is the return standard deviation for your portfolio?
(B) Both Starcents and Jpod have the same return standard deviation of 20 percent, and Starcents and Jpod returns have a correlation of +1. You invest half your funds in Starcents and the other half in Jpod. What is the return standard deviation for your portfolio?
(C) Both Starcents and Jpod have the same return standard deviation of 20 percent, and Starcents and Jpod returns have zero correlation. You invest half your funds in Starcents and the other half in Jpod. What is the return standard deviation for your portfolio?
Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow