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What is the expected return of the risky portfolio P

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Reference no: EM133160612

Question - Consider the following two risky assets:

Expected return (%) Standard Deviation (%)

Stock fund (S) 15 32

Bond fund (B) 9 23

The correlation coefficient between the stock return and the bond return is 0.5.

a. Now construct a risky portfolio P in which WS=0.6 and WB=0.4?

What is the expected return of the risky portfolio P?

b. What is the standard deviation of the risky portfolio P?

Reference no: EM133160612

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