You are interested in investing, and are considering a portfolio comprised of the following two stocks. Their

Question:

You are interested in investing, and are considering a comprised of the following two Their estimated returns under varying market conditions are provided:
Condition Probability of condition Return on security A Return on security B
Economy Sluggish 0.3 0.16 -0.05
Economy Normal 0.4 0.06 0.1
Economy Booms 0.3 -0.02 0.21
What is the for security A?
What is the for security B?
What is the standard deviation for Security A?
What is the standard deviation for Security B?
Now that you have calculated the standard deviations of A and B, assuming an equally weighted of each, calculate the correlation coefficient of the two and use that calculation to discuss the appropriateness of holding the together in a single
Now that you have calculated the standard deviations of A and B, assuming an equally weighted of each, calculate the correlation coefficient of the two and use that calculation to discuss the appropriateness of holding the together in a single Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...