Table 2 E[R] SD[R] TD Bank 7% 16% Lululemon 10% 20%

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 18MCQ
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The correlation between TD Bank stock and Lululemon stock is 22%. Given the return and volatility information in the table below: (a) Find the expected return and volatility of an equally weighted portfolio invested in the two stocks. (b) Repeat (a) for a portfolio that has a long position of $10,000 in TD Bank and a short position of $2,000 in Lululemon. 

 

Table 2
E[R]
SD[R]
TD Bank
7%
16%
Lululemon
10%
20%
Transcribed Image Text:Table 2 E[R] SD[R] TD Bank 7% 16% Lululemon 10% 20%
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