Estimating the expected return

Reference no: EM1376058

The joint probability distribution on the returns of two securities X and Y is shown in the table below.
X
Y 7 10 14
8 0.12 0.03 0.3
9 0.15 0.09 0.06
10 0.05 0.18 0.02

a. Compute the expected return for each security
b. Compute the variance and standard deviation for each security
c. Assume an investor would like to constitute a portfolio of 40 percent of X and 60 percent of Y, what will be the expected return and the risk associated to this portfolio?

Reference no: EM1376058

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