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  3. for the next 4 questions suppose the following hol

For the next 4 questions suppose the following holds: Suppose the security I and security J have...

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Finance

  1. For the next 4 questions suppose the followingholds:

Suppose the security I and security J have the followinghistorical returns:

Year

rI

rJ

2015

20%

40%

2016

29%

36%

2017

-12%

-25%


What is the (arithmetic) average return on security I?

9.17%

12.33%

13.00%

14.18%

15.52%

  1. What is the standard deviation of the return on security I?(Use n-1 for the denominator.)

9.09%

17.39%

20.82%

21.55%

25.18%

Suppose you invest 50% of your money in I and the rest in J toform a portfolio P. What is the average return on portfolio P?

9.17%

11.33%

13.15%

14.67%

17.00%

  1. What is the standard deviation of the return on portfolio P?(Use n-1 for the denominator.)

9.09%

17.39%

25.82%

28.75%

29.02%

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