Your portfolio has 20% invested in stock A and 80% invested in stock B. Stock A has an expected return of 10% and a volatility of 15%. Stock B has an expected return of 12% and volatility of 25%. The correlation between stock A and B is 0.3. What is the variance of your portfolio return? 0.0385 0.0587 O O 0.0445 0.0257
Your portfolio has 20% invested in stock A and 80% invested in stock B. Stock A has an expected return of 10% and a volatility of 15%. Stock B has an expected return of 12% and volatility of 25%. The correlation between stock A and B is 0.3. What is the variance of your portfolio return? 0.0385 0.0587 O O 0.0445 0.0257
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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2?
![QUESTION 2
Your portfolio has 20% invested in stock A and 80% invested in stock B. Stock A
has an expected return of 10% and a volatility of 15%. Stock B has an expected
return of 12% and volatility of 25%. The correlation between stock A and B is
0.3. What is the variance of your portfolio return?
0.0385
0.0587
0.0257
0.0445](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3966b9a7-fe71-44cf-b953-e8752bb97164%2F20102e48-439f-48ec-8923-3269f88fb03d%2F2ovxjdi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:QUESTION 2
Your portfolio has 20% invested in stock A and 80% invested in stock B. Stock A
has an expected return of 10% and a volatility of 15%. Stock B has an expected
return of 12% and volatility of 25%. The correlation between stock A and B is
0.3. What is the variance of your portfolio return?
0.0385
0.0587
0.0257
0.0445
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