Suppose you have a portfolio consisting of two assets, A and B. Stock A has an expected return of 14% and a standard deviation of 31%. Stock B has an expected return of 10% and a standard deviation of 15%. Stocks A and B have a correlation of 0.98. Assuming you invest $7,000 in stock A and $3,000 in stock B, what is the standard deviation of your portfolio? 35.1% 19.4% 26.1% 14.1%
Suppose you have a portfolio consisting of two assets, A and B. Stock A has an expected return of 14% and a standard deviation of 31%. Stock B has an expected return of 10% and a standard deviation of 15%. Stocks A and B have a correlation of 0.98. Assuming you invest $7,000 in stock A and $3,000 in stock B, what is the standard deviation of your portfolio? 35.1% 19.4% 26.1% 14.1%
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter3: Risk And Return: Part Ii
Section: Chapter Questions
Problem 3P: Two-Asset Portfolio
Stock A has an expected return of 12% and a standard deviation of 40%. Stock B...
Related questions
Question
Suppose you have a portfolio consisting of two assets, A and B. Stock A has an expected return of 14% and a standard deviation of 31%. Stock B has an expected return of 10% and a standard deviation of 15%. Stocks A and B have a correlation of 0.98. Assuming you invest $7,000 in stock A and $3,000 in stock B, what is the standard deviation of your portfolio?
35.1% |
||
19.4% |
||
26.1% |
||
14.1% |
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 1 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