Determine the standard deviation of the portfolio

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Reference no: EM13937501

Consider the following portfolio:

Financial instrument Expected return Standard deviation

A 15% 3%

B 25% 12%

C 9% 3%

Instructions:

1. Determine the expected return of the portfolio if you want to distribute your investment at 30% A, 40% B and 30% in C.

2. Determine the standard deviation of the portfolio.

3. Determine the expected return of the portfolio if you want to distribute your investment at 35% A, 25% B and 40% in C.

4. Determine the standard deviation of the portfolio.

5. Identify the distribution of investment that provides increased performance and a lower standard deviation.

Reference no: EM13937501

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