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Standard deviation of the return on portfolio p

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Reference no: EM132742480

An investor can design a risky portfolio with two stocks, A and B. Stock A has an expected return of 19% and a standard deviation of 22.5%. Stock B has an expected return of 15% and a standard deviation of 16%. The correlation coefficient between the two stocks is (-0.5) and the risk-free T-bill rate is 7%.

So, What are the weights of stocks A and B in the optimal risky portfolio (P)? What is the standard deviation of the return on portfolio P?

Reference no: EM132742480

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