Calculate the standard deviation

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ABC Ltd intends to invest Kshs 2,400,000 in a portfolio comprising FOUR securities. The following information relates to the securities under consideration:

Security Return (%) Standard Deviation (%) weight

A 12 3.2 0.25

B 16 1.4 0.33

C 14 2.6 0.27

D 10 1.7 0.15

The covariance between each of the possible security combinations in the portfolio is given below Portfolio Covariance

A,B 2.4

A,C -1.2

A,D 3.9

B,C -1.5

B,D 2.0

C,D 1.6

Assume that the securities are not divisible and each portfolio comprises two different securities.

i. Calculate the standard deviation and coefficient of variation of each possible portfolio.

ii. Advice the company on which portfolio to invest its funds based on your results in

Reference no: EM131030233

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