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To find Mean returns, standard deviation

An analysis of the stock market produces the following information about the returns of two stocks.

Stock 1 Stock 2
Expected Returns 16% 18%
Standard Deviations 20 30

Assume that the returns are positively correlated with = 0.90.

Find the mean and standard deviation of the return on a portfolio consisting of an equal investment in each of the two stocks.

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Proportion of stock 1=X1=0.5
Proportion of stock ...

Solution Summary

Solutions describes the steps in finding mean and standard deviation of mixed portfolio. Expected Return and standard deviation of Individual stocks are given.