You construct a portfolio containing two stocks, X and Y. You invest 80% of your...
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You construct a portfolio containing two stocks, X and Y. You invest 80% of your funds in Stock X and the remainder in Stock Y. Stock X has an expected return of 8.5% and has a standard deviation of 14%. Stock Y has an expected return of 12.5% and has a standard deviation of 22%. The covariance between the two stocks is 0.00308. What is the standard deviation of the returns on the portfolio?
a. 11.95% b. 12.15% c. 12.44% d. 11.74%
You construct a portfolio containing two stocks, X and Y. You invest 80% of your funds in Stock X and the remainder in Stock Y. Stock X has an expected return of 8.5% and has a standard deviation of 14%. Stock Y has an expected return of 12.5% and has a standard deviation of 22%. The covariance between the two stocks is 0.00308. What is the standard deviation of the returns on the portfolio?
a.
11.95%
b.
12.15%
c.
12.44%
d.
11.74%
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