The risk-free rate is 10% per annum, the expected return on the market is 18% per...

  

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The risk-free rate is 10% per annum, the expected return on the market is 18% per annum, and the standard deviation of the market is 15%. A particular share has a standard deviation of 45%, a correlation with the market of 0.33, and an expected return of 30% per annum You currently hold a portfolio of $100,000 invested in the market portfolio. Suppose you switch $1,000 out of the market portfolio into the share identified above. a) What would happen to the expected return and standard deviation of your portfolio? The risk-free rate is 10% per annum, the expected return on the market is 18% per annum, and the standard deviation of the market is 15%. A particular share has a standard deviation of 45%, a correlation with the market of 0.33, and an expected return of 30% per annum You currently hold a portfolio of $100,000 invested in the market portfolio. Suppose you switch $1,000 out of the market portfolio into the share identified above. a) What would happen to the expected return and standard deviation of your portfolio?

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