Purchase Solution

Expected return and standard deviation for a portfolio

Not what you're looking for?

Ask Custom Question

4.

Asset 1 Asset 2
E(R1) = .12 E(R2) = .16
E(s1) = .04 E(s2) = .06

a. Calculate the expected return and expected standard deviation of a two stock portfolio when r1,2 = - .60 and w1 = .75.

b. Calculate the expected returns and expected standard deviations of a two stock portfolio when r1,2 = .80 and w1 = .60.

Purchase this Solution

Solution Summary

The expert calculates the expected return and standard deviation for a two stock portfolio.

Solution Preview

See the attached file.

Asset 1 Asset 2
E(R1) = .12 E(R2) = .16
E(s1) = .04 E(s2) = .06

a. Calculate the expected return and expected standard deviation of a two stock portfolio when r1,2 = - .60 and w1 = .75.

Stock Portfolio Share (w) Expected return ( r ) Standard deviation (s) Correlation (rho)
A (Asset 1) 0.75 0.12 0.04 -0.6
B ...

Purchase this Solution


Free BrainMass Quizzes
Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Basics of corporate finance

These questions will test you on your knowledge of finance.