
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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I am stuck on how to do this problem and I need to understand how to set it up in excel with formulas.

Transcribed Image Text:4.You want to combine the following two stocks into a portfolio: Nike and Microsoft. The
last seven years of returns are listed below. The correlation between the two stocks is
0.65. You willput 54% of your money into Nike and 46% into Microsoft. What would
be the expected return and standard deviation of returns of your portfolio?
3a
-7%a
3%a
40
20
52%
40%a
-15%aa
1%a
19%a
12%a
14%a
Nike
22%a
24%a
Microsofta
16%a
-8%
-7%a
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