Expected return on optimal risky portfolio is approximately

Assignment Help Financial Management

Reference no: EM131985606

An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 21% and a standard deviation of return of 39%. Stock B has an expected return of 14% and a standard deviation of return of 20%. The correlation coefficient between the returns of A and B is .4. The risk-free rate of return is 5%. What is the expected return on the optimal risky portfolio is approximately? (Hint: Find weights first.)

Please show all work calculations (not excel or financial calc.)

Reference no: EM131985606

Questions Cloud

Decision-making process in our economic system : "Invisible hand": What is it and how does it affect the decision-making process in our economic system?

Analyze the power of marketing : Write a one-page paper expressing the extent to which you think marketers shape consumer wants, needs, and must haves.

Which theory or theories are being use by jessica and wilson : Which theory or theories are being used by Jessica, Marco, Maria, and Dr. Wilson to determine the moral status of the fetus? Explain.

Advancing improvements in healthcare : Identify three strategies that you will now incorporate into your practice based on this course (EBP). Explain your rationale

Expected return on optimal risky portfolio is approximately : The risk-free rate of return is 5%. What is the expected return on the optimal risky portfolio is approximately?

Write a business proposal for a client in the hope : Write a business proposal for a client in the hope of setting up a 3-year customer service contract in support of a new application they are launching this mont

What are the approximate and exact rates of inflation : What are the approximate and exact rates of inflation that Candace is using?

What is the yearly interest rate being offered by the dealer : What is the yearly interest rate being offered by the dealer? (to the? customer)?

Structural feature of vertically integrated industry : 1. What is the structural feature of "vertically integrated" industry? 2. How will this type of structure affect the growth of recycling industry?

User Account

All Pages