Suppose that a stock has an expected return of 15% and a standard deviation of 10%. The
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Suppose that a stock has an expected return of 15% and a standard deviation of 10%. The investor wants to minimize the risk of their portfolio by combining this stock with a risk-free asset that has a return of 5%. If the investor wants a portfolio with a standard deviation of 6%, what proportion of their portfolio should be allocated to the stock?
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324664553
Concise 6th Edition
Authors: Eugene F. Brigham, Joel F. Houston
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