# Calculating expected return and standard deviation

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?

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#### Solution Preview

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%

Expected ...

#### Solution Summary

Solution describes the steps to calculate expected return and standard deviation of the given portfolio.

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