Problem #3: Stock X has a standard deviation of returns of 0.6, and Stock Y has a standard deviation of 0.4. The correlation of the two stocks is 0.5. Compute the standard deviation of a portfolio invested half in X and half in Y.
Problem #4: The expected standard deviation of market returns is 0.20.Maria Houseman has the following four stocks:
(see chart in attached file)
Compute the beta of each stock.© BrainMass Inc. brainmass.com June 3, 2020, 6:55 pm ad1c9bdddf
The solution calculates the standard deviation of a portfolio and the beta of stocks.