Suppose you can form portfolios using only two stocks. Stock H and stock M, with the following characteristics:

E(rh)= 17%, E(rm)=12%, phm=0.2, sigma(a)h=30%, Sigma(a)m=20%

Find the portfolio weight on stock H that gives you a two-stock portfolio that has a standard deviation of 25% (Make sure that you invest in an efficient portfolio).

Answer rating: 100% (QA)

Solution To find the portfolio weight on stock H that gives us a twostock portfolio with a standard ... View the full answer