You are an active investor in the securities market and you have established an investment portfolio of two stocks A and B five years ago.Required: d) 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 stockDoes b account for 55% of your portfolio? A BExpected return 12.5% 18.5%Standard Deviation of return 15% 20%Correlation of coefficient (p) 0.4
You are an active investor in the securities market and you have established an investment portfolio of two stocks A and B five years ago.Required: d) 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 stockDoes b account for 55% of your portfolio? A BExpected return 12.5% 18.5%Standard Deviation of return 15% 20%Correlation of coefficient (p) 0.4
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 6P
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You are an active investor in the securities market and you have established an investment portfolio of two stocks A and B five years ago.
Required:
d) 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
Does b account for 55% of your portfolio?
A B
Expected return 12.5% 18.5%
Standard Deviation of return 15% 20%
Correlation of coefficient (p) 0.4
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