Fuels, a company that operates in the Oil and Gas sector, in which
you have invested.
a) Calculate the expected return and the expected volatility
(standard deviation) of Latino's return.
b) Suppose you now want to split your wealth between two stocks:
you invest 70% in the stocks of Latino Fuels and 30% in the stocks
of Charrua Renewable Energy. The expected return on Charrua's stock
is 6% with 10% volatility. The correlation between Latino's and
Charrua's stock is –0.30. What are the expected return and the
standard deviation of returns for this newly formed portfolio
containing the two stocks?
- The Table Below Shows The One Year Return Distribution Of Latino Fuels A Company That Operates In The Oil And Gas Secto 1 (13.17 KiB) Viewed 50 times