An investor places 30% of his funds in Security A and the balance in Security B. The expected returns on A and B are 12% and 18%, respectively. The standard deviations of returns on A and B are 20% and 15% respectively.
(a)Calculate the expected return on the portfolio.
(b)Calculate the Variance of returns on the portfolio assuming that the
correlation between the returns on the two securities is:
I.1.00
II.0.7
III.0
IV.- 0.7
...
Please also mention the formula which u use to solve the problem. Thanks a lot
2007-01-03
03:00:41
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2 answers
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➔ Investing