Calculate the portfolios expected return and risk

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Reference no: EM131444238

Use the 3-asset portfolio return/risk formula to calculate the following portfolio’s expected return and risk.

Asset Class Portfolio weight Expected return Expected risk

Stocks (S) 60% 12% 20%

Bonds (B) 30% 8% 10%

Cash equivalent (C) 10% 4% 3%

Correlation table:

Asset Class Stocks (S) Bonds (B) Cash equivalent (C)

Stocks (S) 1

Bonds (B) 0.25 1

Cash equivalent (C) -0.08 0.15 1

Reference no: EM131444238

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