Stock A has an expected return of 12% and a standard deviation of 40%. Stock B has an expected return of 18% and a standard deviation of 60%. The correlation coefficient between Stocks A and B is 0.2. What are the expected returns and standard deviation of a portfolio invested 30% in Stock A and 70% in Stock B?© BrainMass Inc. brainmass.com June 3, 2020, 11:53 pm ad1c9bdddf
Weight of stock A=wa=0.3
Weight of stock B=wb=0.7
Expected return from stock A=E(Ra)=12%
Standard deviation of stock A=sa=40%
Solution describes the steps to calculate expected return and standard deviation of the given portfolio.