The expected return and standard deviation of a portfolio that is 50 percent invested in 3 Doors, Inc., and 50 percent invested in Down Co. are the following:
3 Doors, Inc. | Down Co. | |||||
Expected return, E(R) | 19 | % | 14 | % | ||
Standard deviation, σ | 62 | 24 | ||||
What is the standard deviation if the correlation is +1? 0? −1? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. )
a) Correlation = +1
Standard deviation = 43.00%
b) Correlation = 0
Standard deviation = 33.24%
c) Correlation = -1
Standard deviation = 19.0%
Get Answers For Free
Most questions answered within 1 hours.