What are the expected annual return

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Question

The European company Glass Inc. has already decided about 70% of their global business, with an expected annual return (denominated in €) of 5.39% and a standard deviation of that return of 11.62%. For the remaining projects, they are considering investing in the US. The proposed US-project has an expected annual return (denominated in €) of 2.20% and a standard deviation of 13.38%. Its correlation with the existing business is -0.37.

What are the expected annual return and its standard deviation if Glass Inc. invests their remaining funds in the US?

Reference no: EM133495653

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