What is the expected return and risk of the portfolio

Assignment Help Financial Management

Reference no: EM131338683

Security A offers an expected return of 15 percent with a standard deviation of 7 percent. Security B offers an expected return of 9 percent with a standard deviation of 4 percent. The correlation between the returns of A and B is +0.6.

If an investor puts one-fourth of his wealth in A and three-fourths in B, what is the expected return and risk (standard deviation) of this portfolio?

Reference no: EM131338683

Questions Cloud

Find the angle of elevation of the sun : National Monuments In 1906, Teddy Roosevelt designated Devils Tower National Monument in northeast Wyoming as the first national monument in the United States. The tower rises 1280 feet above the valley of the Bell Fourche River.

System requires initial investment in net working capital : Franks is looking at a new sausage system with an installed cost of $515,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $77,000. The sausage syste..

Main pros and cons for economic sanctions : 200 words please list references In reference to the material below: what specific objectives would sanctions have in this case? (a) What are the main pros and cons for economic sanctions against the regime and/or the armed groups that are fighting..

Discuss a specific time when you observed a contradiction : Discuss a specific time when you observed a contradiction between: (a) the core values that your organization espouses and (b) the values reflected by the organization's policies or leaders' decisions or actions. To spark your thought process, exa..

What is the expected return and risk of the portfolio : If an investor puts one-fourth of his wealth in A and three-fourths in B, what is the expected return and risk of this portfolio?

Expansion project-requires initial fixed asset investment : Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.58 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be w..

What is probability that an investor in tarheel will earn : What is the probability that an investor in Tarheel will earn a rate of return less than the required rate of return? Assume that returns are normally distributed.

General the linkage between conflicts and development : How would you characterize in general the linkage between conflicts and development? What are the key channels involved here?

Find the measure of each angle of the triangle : If the legs of a right triangle are 24 centimeters and 18 centimeters long, find the measures of the acute angles. The base of an isosceles triangle is 14 inches long. Its height is 8 inches. Find the measure of each angle of the triangle

User Account

All Pages