Without the weights, what are the expected return and Standard deviations of the two assets under the minimum variance portfolio theory? I don't understand how to find the answer without weight and where to begin with the formulas. Expected return Standard deviation Stock fund 15% 34% Bond fund 7% 25% MMF 5.50% Correlation 0.17
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Without the weights, what are the expected return and Standard deviations of the two assets under the minimum variance portfolio theory? I don't understand how to find the answer without weight and where to begin with the formulas.
| Expected return | Standard deviation | |
| Stock fund | 15% | 34% |
| Bond fund | 7% | 25% |
| MMF | 5.50% | |
| Correlation | 0.17 |
Here,
| Expected Return | Standard Deviation | |
| Stock Fund | 15% | 34% |
| Bond Fund | 7% | 25% |
| Money Market Fund | 5.50% | |
| Correlation | 0.17 | |
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