A)Assume that the following data available for the portfolio, calculate the expected return, variance and standard deviation of the portfolio given stock A accounts for 45% and stock B accounts for 55% of your portfolio?

A)Assume that the following data available for the portfolio, calculate the expected return, variance and standard deviation of the portfolio given stock A accounts for 45% and stock B accounts for 55% of your portfolio?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 1PROB

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Question

You are an active investor in the securities market and you have established an investment portfolio of two stock A and B five years ago. Required:

A
B
12.5% 18.5%
Expected return
Standard Deviation of return|15% 20%
Correlation of coefficient (p) 0.4

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