Question: n m m of Jes (Computing the standard deviation for a portfolio of two risky investments) Mary Guilott recently graduated from Nichols State University
n m m of Jes (Computing the standard deviation for a portfolio of two risky investments) Mary Guilott recently graduated from Nichols State University and is anxious to begin Question Help investing her meager savings as a way of applying what she has learned in business school Specifically, she is evaluating an investment in a portfolio comprised of two firms' common stock. She has collected the following information about the common stock of Firm A and Firm B a. If Mary invests half her money in each of the two common stocks, what is the portfolio's expected rate of return and standard deviation in portfolio return? b. Answer part a where the correlation between the two common stock investments is equal to zero c. Answer part a where the correlation between the two common stock investments is equal to +1. d. Answer part a where the correlation between the two common stock investments is equal to -1. e. Using your responses to questions a-d describe the relationship between the correlation and the risk and return of the portfolio a. If Mary decides to invest 50% of her money in Firm A's common stock and 50% in Firm B's common stock and the correlation between the two stocks is 0.70, then the expected rate of return in the portfolio is % (Round to two decimal places)
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