# Expected Return and Standard Deviation of Ebenezer Scrooge's Portfolio

Ebenezer Scrooge has invested 60% of his money in share A and the remainder in share B. He assesses their prospects as follows:

A B

Expected return (%) 15 20

Standard deviation (%) 20 22

Correlation between returns .5

a. What are the expected return and standard deviation of returns on his portfolio?

b. How would your answer change if the correlation coefficient were 0 or -.5?

c. Is Mr. Scrooge's portfolio better or worse than one invested entirely in share A, or is it not possible to say?

https://brainmass.com/business/finance/expected-return-and-standard-deviation-of-ebenezer-scrooge-s-portfolio-386202

#### Solution Preview

Ebenezer Scrooge has invested 60% of his money in share A and the remainder in share B. He assesses their prospects as follows:

A B

Expected return (%) 15 20

Standard deviation (%) 20 22 ...

#### Solution Summary

This solution shows which investment option is better for Ebenezer Scrooge with formula and calculations.