Question: PLEASE ANSWER BOTH PARTS. PART A: The table below shows the expected rates of return for three stocks and their weight in some portfolio: Stock

PLEASE ANSWER BOTH PARTS.

PART A:

The table below shows the expected rates of return for three stocks and their weight in some portfolio:

	Stock A	Stock B	Stock C
Expected return	0.05	0.03	0.13
Weight	0.2	0.2	0.6

What is the expected portfolio return?

PART B:

The return on Samsung stock has a standard deviation of 39% and the return on Toyota stock has a standard deviation of 15%. Their covariance is 0.0234.

If you invest 30% in Samsung and 70% in Toyota, what is the variance of the portfolio?

What is the standard deviation of the portfolio?

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