Question
Given the following information: Expected return on Stock A .15 (15%) Standard deviation of return 0.3...
Given the following information:
|
Expected return on Stock A |
.15 (15%) |
|
Standard deviation of return |
0.3 |
|
Expected return on Stock B |
.18 (18%) |
|
Standard deviation of return |
0.4 |
|
Correlation coefficient of the returns on Stock A and Stock B |
0.75 |
a. What are the expected returns and
standard deviations of the following
portfolios?
1. 100 percent of funds invested in Stock A
2. 100 percent of funds invested in Stock B
3. 50 percent of funds invested in each stock?
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