An investor has decided to fo investor assumes that the ex be 15% and 10%, respectivel returns have a correlation cc O Var [Return on portfolio] = 0.00 %3!
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
![QUESTION 36
An investor has decided to form a portfolio by putting 55% of his money into Tesla's stock and 45% into Honda's stock. The
investor assumes that the expected returns will be 18% on Tesla and 12% on Honda, and that the standard deviations will
be 15% and 10%, respectively. What is the variance of returns on the portfolio, if the investor assumes that the two stocks'
returns have a correlation coefficient equal to -0.5?
Var [Return on portfolio] = 0.00215
%3D
O Var [Return on portfolio] = 0.00512
%3D
O Var [Return on portfolio] = 0.00152
%3D
Var [Return on portfolio] = 0.00125](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5631fd23-38fc-44c7-b387-9304ce5bce88%2F9a09eb4f-4d9e-42f4-8a05-e2cb69488a30%2Fp9jl29l_processed.jpeg&w=3840&q=75)
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