# Finance: Portfolio return and risk.

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Problem 13. Security A offers an expected return of 15 percent with a standard deviation of 7 percent. Security B offers an expected return of 9 percent with a standard deviation of 4 percent. The correlation between the returns of A and B is +0.6. If an investor puts one-fourth of his wealth in A and three-fourths in B, what is the expected return and risk(standard deviation) of this portfolio?

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##### Solution Summary

The problem deals with estimating the rate of return and standard deviation for two securities. The expected return and risk of the portfolio are determined.

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RATE OF RETURN AND STANDARD DEVIATION

Problem 13. Security A offers an expected return of 15 percent with a standard deviation of 7 percent. Security B offers an expected return of 9 percent with ...

###### Education

- B. Sc., University of Nigeria
- M. Sc., London South Bank University

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