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Stock I has an expected return of 8.4% per year and an expected return variance of 196.4%% per year. Stock J has an expe
Posted: Wed Jul 06, 2022 6:43 pm
by answerhappygod
- Stock I Has An Expected Return Of 8 4 Per Year And An Expected Return Variance Of 196 4 Per Year Stock J Has An Expe 1 (36.11 KiB) Viewed 21 times
Stock I has an expected return of 8.4% per year and an expected return variance of 196.4%% per year. Stock J has an expected return of 7.8% per year and an expected return variance of 223.8 % % per year. The covariance of the expected returns of the two stocks is 85.2% %. The risk-free interest rate is 2.5% per year. What is the standard deviation of the expected return for a portfolio that consists of $200,000 of stock 1, $300,000 of stock J, and $200,000 of the risk-free asset? 1) 8.9% 2) 7.4% 3) 9.8% 4) 6.8% 5) 10.2%