Homework Answers
a. Expected Return of Portfolio =10%*0.17+90%*0.11 =11.60%
Standard Deviation of Portfolio
=((10%*0.12)^2+((90%*0.05)^2+2*10%*90%*0.12*0.05*0.30)^0.5
=4.99%
b. Expected Return of Portfolio =90%*0.17+10%*0.11 =16.40%
Standard Deviation of Portfolio
=((90%*0.12)^2+((10%*0.05)^2+2*90%*10%*0.12*0.05*0.30)^0.5
=10.96%
c. Expected Return of Portfolio =10%*0.17+90%*0.11 =11.60%
Standard Deviation of Portfolio
=((10%*0.12)^2+((90%*0.05)^2-2*10%*90%*0.12*0.05*0.30)^0.5
=4.30%
d. Expected Return of Portfolio =90%*0.17+10%*0.11 =16.40%
Standard Deviation of Portfolio
=((90%*0.12)^2+((10%*0.05)^2-2*90%*10%*0.12*0.05*0.30)^0.5
=10.66%
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a. If Mary invests half her money in each of the two common stocks, what is...
a. If Mary invests half her money in each of the two common
stocks, what is the portfolio's expected rate of return and
standard deviation in portfolio return?
b. Answer part a where the correlation between the two common
stock investments is equal to zero.
c. Answer part a where the correlation between the two common
stock investments is equal to +1
d. Answer part a where the correlation between the two common
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a. If Mary invests half her money in each of the two
commonstocks, what is the portfolio's expected rate of return and
standard deviation in portfolio return?
b. Answer part a where the correlation between the two common
stock investments is equal to zero.
c. Answer part a where the correlation between the two common
stock investments is equal to plus+1.
d. Answer part a where the correlation between the two common
stock investments is equal to minus−1.
e. Using...
a. If Mary invests half her money in each of the two common
stocks, what is the portfolio's expected rate of return and
standard deviation in portfolio return?
b. Answer part a where the correlation between the two common
stock investments is equal to zero.
c. Answer part a where the correlation between the two common
stock investments is equal to +1
d. Answer part a where the correlation between the two common
stock investments is equal to -1
e....
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