You are currently considering in investing Rs.1.2 million in equity investment portfolio. Your analysis reveals that equity stock of the following three companies are suitable options for your investment. Company R 22 P Expected retum (%) Standard deviation (%) Correlation coefficient; PQ QR PR 25 20 30 26 24 -0.5 +0.4 +0.6 You are required to; (a) Calculate the expected retum of the portfolio if Rs.1.2 million is equally invested in the stocks of all three companies.
You are currently considering in investing Rs.1.2 million in equity investment portfolio. Your analysis reveals that equity stock of the following three companies are suitable options for your investment. Company R 22 P Expected retum (%) Standard deviation (%) Correlation coefficient; PQ QR PR 25 20 30 26 24 -0.5 +0.4 +0.6 You are required to; (a) Calculate the expected retum of the portfolio if Rs.1.2 million is equally invested in the stocks of all three companies.
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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Question
![You are currently considering in investing Rs.1.2 million in equity investment
portfolio. Your analysis reveals that equity stock of the following three
companies are suitable options for your investment.
Company
P
R
Expected retum (%)
Standard deviation (%)
Correlation coefficient;
25
22
20
30
26
24
PQ
QR
-0.5
+0.4
PR
+0.6
You are required to;
(a) Calculate the expected returm of the portfolio if Rs.1.2 million is equally
invested in the stocks of all three companies.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fece1d43e-b82b-4773-a006-3a0eb952ff2c%2Fb692de55-cfb3-4480-bab6-355ba25c6e01%2Fn1sazih_processed.png&w=3840&q=75)
Transcribed Image Text:You are currently considering in investing Rs.1.2 million in equity investment
portfolio. Your analysis reveals that equity stock of the following three
companies are suitable options for your investment.
Company
P
R
Expected retum (%)
Standard deviation (%)
Correlation coefficient;
25
22
20
30
26
24
PQ
QR
-0.5
+0.4
PR
+0.6
You are required to;
(a) Calculate the expected returm of the portfolio if Rs.1.2 million is equally
invested in the stocks of all three companies.
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