The table below summarizes the expected returns and standard deviations of stock A and B The correlation coefficient between the two stocks is 0 7 An investor considers an investment portfolio with $6000 invested in stock A and $6000 invested in stock B Stock Expected Return Standard Deviation A 9 12 B 14 23 Answer the following questions What is the portfolio's expected return What is the covariance between stock A and B What are the portfolio's variance and standard deviation d What is the portfolio's expected Sharpe ratio if the interest rate is 5

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Question: The table below summarizes the expected returns and standard deviations of stock A and B. The correlation coefficient between the two stocks is 0.7. An

The table below summarizes the expected returns and standard deviations of stock A and B. The correlation coefficient between the two stocks is 0.7. An investor considers an investment portfolio with $6000 invested in stock A and $6000 invested in stock B.

Stock	Expected Return	Standard Deviation
A	9%	12%
B	14%	23%

Answer the following questions

What is the portfolio's expected return?
What is the covariance between stock A and B?
What are the portfolio's variance and standard deviation?
d. What is the portfolio's expected Sharpe ratio if the interest rate is 5%?

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