9 • You have two assets to choose from for your portfolio: A and B. Youchoose 25% A and 75% B. The statistics of the two assets are:E(r) = 7%, E(r₂ ) = 12%o² = 0.0016, 0² = 0.0049ABCompute the expected return and variance of your portfolio undereach of the following assumptions:●= = 0.51. PAB• 2. PAB = 0.03. PAB = -0.5

Expected return of a portfolio is the summation of weighted average return of each security. Where…

You have two assets to choose from for your portfolio: A and B. You choose 25% A and 75% B. The statistics of the two assets are: • E(r) = 7%, E(r₂ ) = 12% B 0² = 0.0016, 0² B = 0.0049 A Compute the expected return and variance of your portfolio under each of the following assumptions: • 1. PAB = 0.5

You have two assets to choose from for your portfolio: A and B. You choose 25% A and 75% B. The statistics of the two assets are: • E(r) = 7%, E(r₂ ) = 12% B 0² = 0.0016, 0² B = 0.0049 A Compute the expected return and variance of your portfolio under each of the following assumptions: • 1. PAB = 0.5

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 9PROB

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