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Calculate the expected return of a portfolio

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Reference no: EM132493109

Suppose the expected returns and standard deviations of Stocks A and B are E(RA) = .089, E(RB) = .149, σA = .359, and σB = .619.

Question a. Calculate the expected return of a portfolio that is composed of 34 percent Stock A and 66 percent Stock B when the correlation between the returns on A and B is .49.

Question b. Calculate the standard deviation of a portfolio that is composed of 34 percent Stock A and 66 percent Stock B when the correlation between the returns on A and B is .49.

Question c. Calculate the standard deviation of a portfolio with the same portfolio weights as in part (a) when the correlation coefficient between the returns on Stocks A and B is -.49

Reference no: EM132493109

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