Please solve problem 2. Problem 1 is correct with the answer in bold. Problem 25
ID: 2764633 • Letter: P
Question
Please solve problem 2. Problem 1 is correct with the answer in bold.
Problem 25-3
Two-Asset Portfolio
1) Stock A has an expected return of 14% and a standard deviation of 35%. Stock B has an expected return of 16% and a standard deviation of 55%. The correlation coefficient between Stocks A and B is 0.2. What is the expected return of a portfolio invested 20% in Stock A and 80% in Stock B? Round your answer to two decimal places.
ANSWER: 15.60 %
2) What is the standard deviation of a portfolio invested 20% in Stock A and 80% in Stock B? Round your answer to two decimal places.
ANSWER: ___ %
Explanation / Answer
Answer: 45.92%