Question: Using the following information, find the Expected Return, Variance, and Standard Deviation for the returns on Stock 1 and Stock 2. Also, find the Covariance
Using the following information, find the Expected Return, Variance, and Standard Deviation for the returns on Stock 1 and Stock 2. Also, find the Covariance and Correlation Coefficient between the returns on Stocks 1 and 2. If you invest $10,000 in stock X and $25,000 in stock Y, what would be the expected return and risk on your portfolio?
| States | Probability | Return on StockX | Return on StockY |
| A | 10% | 15% | 25% |
| B | 25% | 15% | 20% |
| C | 30% | 17% | 12% |
| D | 35% | 20% | 10% |
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