Consider two stocks, Stock D, with an expected return of 19 percent and a standard deviation of 34 percent, and Stock I, an international company, with an expected return of 7 percent and a standard deviation of 22 percent. The correlation between the two stocks is -0.20. What are the expected return and standard deviation of the minimum variance portfolio? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Expected return Standard deviation 7.66% 10.07%
Consider two stocks, Stock D, with an expected return of 19 percent and a standard deviation of 34 percent, and Stock I, an international company, with an expected return of 7 percent and a standard deviation of 22 percent. The correlation between the two stocks is -0.20. What are the expected return and standard deviation of the minimum variance portfolio? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Expected return Standard deviation 7.66% 10.07%
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 5P
Related questions
Question
![Consider two stocks, Stock D, with an expected return of 19 percent and a standard deviation of 34 percent, and Stock I, an
international company, with an expected return of 7 percent and a standard deviation of 22 percent. The correlation between the two
stocks is -0.20. What are the expected return and standard deviation of the minimum variance portfolio?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Expected return
Standard deviation
7.66 %
10.07%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc79b9d32-37ad-4fcf-afa0-fa78fa223ab8%2F90d795cd-e4ef-4cbd-a3df-7f6b5e49356c%2F5ihudmd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consider two stocks, Stock D, with an expected return of 19 percent and a standard deviation of 34 percent, and Stock I, an
international company, with an expected return of 7 percent and a standard deviation of 22 percent. The correlation between the two
stocks is -0.20. What are the expected return and standard deviation of the minimum variance portfolio?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Expected return
Standard deviation
7.66 %
10.07%
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning