Question: PLEASE NEED IT ASAP The expected return on Big Time Toys is 13% and its standard deviation is 21.8%. The expected return on Chemical Industries
PLEASE NEED IT ASAP
The expected return on Big Time Toys is 13% and its standard deviation is 21.8%. The expected return on Chemical Industries is 10% and its standard deviation is 27.7%.
a. Suppose the correlation coefficient for the two stocks' returns is 0.29. What are the expected return and standard deviation of a portfolio with 56% invested in Big Time Toys and the rest in Chemical Industries? (Round your answers to 2 decimal places.)
| Portfolio's expected return % | |
| Portfolio's standard deviation % |
b. If the correlation coefficient is 0.79, recalculate the portfolio expected return and standard deviation, assuming the portfolio weights are unchanged. (Round your answers to 2 decimal places.)
| Portfolio's expected return % | |
| Portfolio's standard deviation % |
c. Why is there a slight difference between the results, when the correlation coefficient was 0.29 and when it was 0.79?
The high correlation is between two variables the less potential
the higher correlation. between 2 variables the less potantial
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