Study guide ex

A portfolio consist of Stock A and stock B

Stock A: expected return = 10%

Stock A: Standard deviation= 30%

Stock B: expected return= 13%

Stock B: Standard deviation= 45%

Correlation between A and B 0.25

Stock A Beta1.30

Stock B Beta1.20

% portfolio in stock A40%

% portfolio in stock B 60%

a. Calculate the expected return of the portfolio

b.Calculate the standard deviation of the portfolio.

Portfolio: standard deviation

c. Calculate the beta of the portfolio

d. does the portfolio have more risks, or the same risk as the market? Explain