What are the expected return and standard deviation

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Ebenezer Scrooge has invested 65% of his money in share A and the remainder in share B. He assesses their prospects as follows:

A 14 B 23 Expected return (%)

Standard deviation (%)A 19  B 25

Correlation between returns .5 

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.)

Expected return %

Standard deviation %

b. How would your answer change if the correlation coefficient were 0 or -.5? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

  • Correlation
  • Coefficient
  • Correlation
  • Coefficient -.5Standard deviation % %

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

BetterWorseNot possible to say

Reference no: EM132376222

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