A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 15% while stock B has a standard deviation of return of 35%. The correlation coefficient between the returns on A and B is 0.45. Stock A comprises 60% of the portfolio while stock B comprises 40% of the portfolio. The standard deviation of the return on this portfolio is 19.76% 23.00% 17.67% 18.45%

A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 15% while stock B has a standard deviation of return of 35%. The correlation coefficient between the returns on A and B is 0.45. Stock A comprises 60% of the portfolio while stock B comprises 40% of the portfolio. The standard deviation of the return on this portfolio is 19.76% 23.00% 17.67% 18.45%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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