a?What are the mean stock returns of stock A and stock B? b) what are the standa
ID: 2649230 • Letter: A
Question
a?What are the mean stock returns of stock A and stock B?
b) what are the standard deviations of stock returns of stock A and stock B?
c) What is the correlation of returns between stock A and B?
d) If you invest 35% of your money in A and 65% in B, what would be your portfolio's expected rate of return and standard deviation?
Consider the following probability distribution for stocks A and B: Probability 0.15 0.20 0.15 0.30 0.20 Return on Stock B 8% 790 690 9% 11% State Return on Stock A on StOC 890 13% 12% 14% 16% 4Explanation / Answer
State Probability (A) Return on stock A(B) Return on stock B (C) Deviation from expected return stock A (D) Deviation from expected return stock B
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