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QUESTION
Security A has an expected return of 10 percent and a standard deviation of 53 percent per year. Security B has and expected return of 13 percent and...
Security A has an expected return of 10 percent and a standard deviation of 53 percent per year. Security B has and expected return of 13 percent and a standard deviation of 79% per year.
a. Your portfolio is invested 45% in A 55 percent in B. What is the expected return of the portfolio?
b. what is the variance of the portfolio if the correlation between Security A and Security B is 0.4?
