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A finance analyzer have come to the conclusion that he wants to purchase stocks from Company A, with an expected yield of E(X) = 4% and variance to the yield being V(X) = 0.49. Another stock from another Company B have an expected yield of E(Y) = 6% and variance V(Y) = 0.64. The correlation of the yield between the two stocks is p(X,Y) = 0.3.  The finance analyzer wants to invest a portion p(0 < p < 1) into Company A stocks, and the rest (1 - p) into company B stocks. The combined investment have a yield of W = pX + ( 1 - p)Y. For p = 0.4, such that W = 0.4X + 0.6Y.

A finance analyzer have come to the conclusion that he wants to purchase stocks from Company A, with an expected yield of E(X) = 4% and variance to the yield being V(X) = 0.49. Another stock from another Company B have an expected yield of E(Y) = 6% and variance V(Y) = 0.64. The correlation of the yield between the two stocks is p(X,Y) = 0.3.  The finance analyzer wants to invest a portion p(0 < p < 1) into Company A stocks, and the rest (1 - p) into company B stocks. The combined investment have a yield of W = pX + ( 1 - p)Y. For p = 0.4, such that W = 0.4X + 0.6Y.

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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A finance analyzer have come to the conclusion that he wants to purchase stocks from Company A, with an expected yield of E(X) = 4% and variance to the yield being V(X) = 0.49. Another stock from another Company B have an expected yield of E(Y) = 6% and variance V(Y) = 0.64. The correlation of the yield between the two stocks is p(X,Y) = 0.3. 

The finance analyzer wants to invest a portion p(0 < p < 1) into Company A stocks, and the rest (1 - p) into company B stocks. The combined investment have a yield of W = pX + ( 1 - p)Y.

For p = 0.4, such that W = 0.4X + 0.6Y.

What is the expected value and variance for W. 

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