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What is the expected risk and return for a portfolio

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Reference no: EM131708367

Question: Google and Vodafone. An investor is evaluating a two-asset portfolio of the following securities:

Assumptions              Expected Return           Expected Risk(σ)     Correlation(ρ)

Google(U.S.)                  18.60%                       22.80%                   0.60

Vodafone(U.K.)               16.00%                       24.00%

a. If the two securities have a correlation of +0.6, what is the expected risk and return for a portfolio that is equally weighted?

b. If the two securities have a correlation of +0.6, what is the expected risk and return for a portfolio that is 70% Google and 30% Vodafone?

c. If the two securities have a correlation of +0.6, what is the expected risk and return for a portfolio that has the minimum combined risk.

Reference no: EM131708367

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