Your portfolio consists of $50,000 invested in Stock X and $50,000 invested in Stock Y. Both stocks have an expected return of 15%, a beta of 1.6, and a standard deviation of 30%. The returns of the two stocks are independent, so the correlation coefficient between them, rxy, is zero. Which of the following statements best describes the characteristics of your portfolio?

A. Your portfolio has a beta equal to 1.6 and its expected return is 15%.
B. Your portfolio has a standard deviation of 30% and its expected return is 15%.
C. Your portfolio has a standard deviation less than 30% and its beta is greater than 1.6.
D. Your portfolio has a standard deviation greater than 30% and a beta equal to 1.6.
E. Your portfolio has a beta greater than 1.6 and an expected return greater than 15%.

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Your portfolio consists of $50,000 invested in Stock X and $50,000 invested in Stock Y. Both stocks have an expected return of 15%, a beta of 1.6, and a standard deviation of 30%. The returns of the two stocks are independent, so the correlation coefficient between them, rxy, is zero. Which of the following statements ...

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This solution is comprised of a detailed explanation to answer which of the following statements best describes the characteristics of your portfolio.

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2000 18.0% 37.0%
2001 -5.0% 10.0%
2002 0.0% -37.0%
2003 32.0% 11.0%
2004 22.5% -7.0%
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2006 11.0% 23.5%
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Please help with the attached problem.
Thank you.
Stocks A and B have the following historical returns:
Year Stock A's Returns, Stock B's Returns
2001 -18.00% -14.50%
2002 33.00 21.80
2003 15.00 30.50
2004 0.50 (7.60)
2005 27.00 26.30
a. Calculate the average rate of r

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5.13 in Ch. 5
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2010 14% 20%
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2012 16 16
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2014 17 12
2015 19 10
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