An investor owns a portfolio consisting of two mutual funds, A and B, with 50% invested...
An investor owns a portfolio consisting of two mutual funds, A
and B, with 50% invested in A. The following table lists the inputs
for these funds.
| Measures | Fund A | Fund B | |||
| Expected value | 10 | 3 | |||
| Variance | 63 | 26 | |||
| Covariance | 28 | ||||
a. Calculate the expected value for the portfolio
return. (Round your answer to 2 decimal
places.)
b. Calculate the standard deviation for the portfolio
return. (Round intermediate calculations to at least 4
decimal places. Round your final answers to 2 decimal
places.)
Homework Answers
a)
expected value for the portfolio return =0.5*10+0.5*3=6.5
b)
standard deviation =sqrt(0.52*63+0.52*26+2*0.5*0.5*28)=6.02
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