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What are expected return and standard deviation of returns

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Reference no: EM133053810

Question - Ebenezer Scrooge has invested 40% of his money in share A and the remainder in share B. He assesses their prospects as follows:

A B

Expected return (%) 13 23

Standard deviation (%) 16 29

Correlation between returns 0.3

Required -

a. What are the expected return and standard deviation of returns on his portfolio? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

b. How would your answer change if the correlation coefficient were 0 or -0.30? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

c. Is Mr. Scrooge's portfolio better or worse than one invested entirely in share A, or is it not possible to say?

Reference no: EM133053810

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