English Deutsch Français Italiano Español Português 繁體中文 Bahasa Indonesia Tiếng Việt ภาษาไทย
All categories

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 · 2 answers · asked by Me 2 in Business & Finance Investing

2 answers

Expected return=0.12x30+0.18x70
To the second part of your question is not answerable based on the data given.

2007-01-03 04:07:21 · answer #1 · answered by Mathew C 5 · 0 0

Expected return over what time period??

2007-01-03 03:20:09 · answer #2 · answered by MR MONEY 3 · 0 0

fedest.com, questions and answers