Calculate the expected return ans standard deviation

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Reference no: EM131997478

Stock S has an expected return of 0.14 while Bond B has an expected return of 0.10. The variance-covariance matrix between S and B is

	S	B
S	0.25	0.06
B		0.09

T- bills offers a 0.03 rate

a.) between S and B, which one is the better investment and why.

b.) Calculate the expected return ans standard deviation of a portfolio of S and B that has the lowest risk.

c.) Calculate the expected return ans standard deviation of a portfolio of S and B that has the highest reward-to-variability ratio

d.) Between S, B, the portfolio from part (b), and the portfolio from part (c), which one is the better investment and why.

Reference no: EM131997478

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