Question: Data about returns for both security X and security Y are provided below: SECURITY X SECURITY Y Probability Return 30% 20% 10% 5% -10%
Data about returns for both security X and security Y are provided below: SECURITY X SECURITY Y Probability Return 30% 20% 10% 5% -10% Probability 0.10 0.20 0.40 0.20 0.10 You are required to calculate: (a) (b) (c) (d) Return -20% 10% 20% 30% 40% 0.10 0.20 0.40 0.20 0.10 The Expected Return of Security X and Security Y The Standard Deviation of Return for Security X and Y The Expected Return of the Portfolio of X and Y, combined [2 marks] [3 marks] with equal weights [2 marks] The Standard Deviation of the Return of the Portfolio if the two securities are independent (unrelated). [3 marks]
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