Calculate the expected return and volatility? of portfolio

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Reference no: EM131510922

Suppose Johnson? & Johnson and Walgreen Boots Alliance have expected returns and volatilities shown? here,with a correlation of 23%.

Calculate (a?) the expected return and (b?) the volatility? (standard deviation) of a portfolio that consists of a long position of $8,000 in Johnson? & Johnson and a short position of $3,000 in Walgreens.

Johnson & Johnson Expected Return 6.9% Standard Deviation 17.8%

Walgreens Boots Alliance Expected Return 9.6% Standard Deviation 20.7%

a. Calculate the expected return.

The expected return is _________(Answer)

?(Round to one decimal? place.)

b. Calculate the volatility? (standard deviation).

The volatility is __________(Answer)

? (Round to one decimal? place.)

Reference no: EM131510922

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