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QUESTION
Jack Black owns two securities: Apple and Coca-Cola. Apple has an expected return of 15% with a standard deviation of those returns being 11%.
Jack Black owns two securities: Apple and Coca-Cola. Apple has an expected return of 15% with a standard deviation of those returns being 11%. Coca-Cola has an expected return of 12%; a standard deviation of 7%. The correlation of returns between Apple and Coca-Cola is .81. If the portfolio consists of $6,000 in Coca-Cola and $4,000 in Apple, what is the expected return and standard deviation of portfolio?
