QUESTION 6 10 p You expect the market portfolio to return 14%. US government Tbl

Question

QUESTION 6 10 p You expect the market portfolio to return 14%. US government Tblis yield 496-Yoa invest Stock A and $16,000 in Stock B. Stook A has beta-0.6 and Stock B has beta-1.9. What is the expected return on your portfolio? OA 20.40% in 197596 O c.2606% D. 18.6796 QUESTION 7 10 poi Is the variance of a portfolio equal to the weighted-average of the variances of the stocks that make up the portfolio? OA. "OC. O D. No Click Save and Submit to save and submit. Click Save All Answers to save all answers Save All Answers Ai F10 F9 F8

Explanation / Answer

7. Variance of portfolio = (w(1)^2 x o(1)^2) + (w(2)^2 x o(2)^2) + (2 x (w(1)o(1)w(2)o(2)q(1,2))

o = variance of the asset

q = correlation between asset 1 and 2.

Answer is option B.

Please post other question separately. Thanks.

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