Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. your client has $97.000 invested in stock a. she w

Your client has $97.000 invested in stock A. She would like to build a two-stock...

50.1K

Verified Solution

Question

Finance

image
Your client has $97.000 invested in stock A. She would like to build a two-stock portfolio by investing another $97,000 in either stock B or C. She wants a portfolio with an expected return of at least 14,5% and as low a risk as possible, but the standard deviation must be no more than 40%. What do you advise her to do, and what will be the portfolio expected return and standard deviation? Expected Return Standard Deviation Correlation with A A 15% 49% 1.00 B 14% 37% 0.17 14% 37% 0.31 The expected return of the portfolio with stock Bis [ % (Round to one decimal place.) The expected return of the portfolio with stock C is % (Round to one decimal place.) The standard deviation of the portfolio with stock B is % (Round to one decimal place.) The standard deviation of the portfolio with stock C is 1% (Round to one decimal place.) (Select from the drop-down menu) You would advise your client to choose because it will produce the portfolio with the lower standard deviation

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students