An investor has decided to form a portfolio by putting 55% of his money into Tesla's stock and 45% into Honda's stock. The investor assumes that the expected returns will be 18% on Tesla and 12% on Honda, and that the standard deviations will be 15% and 10%, respectively. What is the expected (mean) return on the portfolio? O E [Return on portfolio] = 0.135 O E [Return on portfolio] = 0.204 O E [Return on portfolio] = 0.153 O E [Return on portfolio] = 0.351
An investor has decided to form a portfolio by putting 55% of his money into Tesla's stock and 45% into Honda's stock. The investor assumes that the expected returns will be 18% on Tesla and 12% on Honda, and that the standard deviations will be 15% and 10%, respectively. What is the expected (mean) return on the portfolio? O E [Return on portfolio] = 0.135 O E [Return on portfolio] = 0.204 O E [Return on portfolio] = 0.153 O E [Return on portfolio] = 0.351
A First Course in Probability (10th Edition)
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ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
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![QUESTION 27
An investor has decided to form a portfolio by putting 55% of his money into Tesla's stock and 45% into Honda's stock. The
investor assumes that the expected returns will be 18% on Tesla and 12% on Honda, and that the standard deviations will
be 15% and 10%, respectively. What is the expected (mean) return on the portfolio?
O E [Return on portfolio] = 0.135
%3D
O E [Return on portfolio] = 0.204
%3D
O E [Return on portfolio] = 0.153
O E [Return on portfolio] = 0.351
%3D](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5631fd23-38fc-44c7-b387-9304ce5bce88%2Fb51631f8-4a55-4013-be09-618274e5030a%2Fyqt9bhs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:QUESTION 27
An investor has decided to form a portfolio by putting 55% of his money into Tesla's stock and 45% into Honda's stock. The
investor assumes that the expected returns will be 18% on Tesla and 12% on Honda, and that the standard deviations will
be 15% and 10%, respectively. What is the expected (mean) return on the portfolio?
O E [Return on portfolio] = 0.135
%3D
O E [Return on portfolio] = 0.204
%3D
O E [Return on portfolio] = 0.153
O E [Return on portfolio] = 0.351
%3D
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