Explore BrainMass

To find Mean returns, standard deviation

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

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.

© BrainMass Inc. brainmass.com March 21, 2019, 11:49 am ad1c9bdddf

Solution Preview

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.