Consider two stocks: WMT and IBM with the following prop- erties Stock E(tr) (tr) WMT 8%...

 

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Consider two stocks: WMT and IBM with the following prop- erties Stock E(tr) (tr) WMT 8% 13% IBM 12% 20% The correlation of the two stock returns is and the risk-free rate is PWMT, IBM = 9%, r = 1%. You are advising a client who has $1 million invested. Currently 50% of this money is in WMT and 50% is in IBM. 3. You wish to match the expected return of your client's current port- folio using only WMT, IBM, and the risk-free security. What is the minimum standard deviation you can achieve? Consider two stocks: WMT and IBM with the following prop- erties Stock E(tr) (tr) WMT 8% 13% IBM 12% 20% The correlation of the two stock returns is and the risk-free rate is PWMT, IBM = 9%, r = 1%. You are advising a client who has $1 million invested. Currently 50% of this money is in WMT and 50% is in IBM. 3. You wish to match the expected return of your client's current port- folio using only WMT, IBM, and the risk-free security. What is the minimum standard deviation you can achieve?

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