You have a portfolio with a standard deviation of 30% and an expected return of 19%. You are considering adding one of t

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899604
Joined: Mon Aug 02, 2021 8:13 am

You have a portfolio with a standard deviation of 30% and an expected return of 19%. You are considering adding one of t

Post by answerhappygod »

You have a portfolio with a standard deviation of
30%
and an expected return of
19%.
You are considering adding one of the two stocks in the
following table. If after adding the stock you will have
25%
of your money in the new stock and
75%
of your money in your existing​ portfolio, which one should
you​ add?
Expected
Return
Standard
Deviation
Correlation with
Your​ Portfolio's Returns
Stock A
13​%
25​%
0.3
Stock B
13​%
17​%
0.7
Question content area bottom
Part 1
Standard deviation of the portfolio with stock A is
enter your response here​%.
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Post Reply