Assume you wish to construct a portfolio by investing $4000 in Stock A which has...
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Assume you wish to construct a portfolio by investing $4000 in Stock A which has a return of 6% and a standard deviation of 10%. In the portfolio, you will also invest $6000 in stock B which has a return of 8% and a standard deviation of 13%. Assuming that the returns on stock A and on stock B have a correlation coefficient of 0.5, what is the portfolio standard deviation? a. 10.98% b. 10.39% c. None of the above d. 10.69% e. 10.09%
Assume you wish to construct a portfolio by investing $4000 in Stock A which has a return of 6% and a standard deviation of 10%. In the portfolio, you will also invest $6000 in stock B which has a return of 8% and a standard deviation of 13%. Assuming that the returns on stock A and on stock B have a correlation coefficient of 0.5, what is the portfolio standard deviation?
a.
10.98%
b.
10.39%
c.
None of the above
d.
10.69%
e.
10.09%
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