5.4.55 Question Help Suppose that you want to create a portfolio that consists o

Question

5.4.55 Question Help Suppose that you want to create a portfolio that consists of a corporate bond fund, X, and a common stock fund, Y. For a expected return for Y is $99. The variance for X is 1,500 and the variance for Y is 11,650. The covariance ofX a. Compute the portfolio expected return and portfolio risk if you p $1,000 investment, the expected return for X is $71 and the and Y is 4,002. Complete parts (a) through (d) t $400 in the corporate bond fund and $600 in the common stock fund The portfolio expected return is $ Type an integer or a decimal.) Enter your answer in the answer box and then click Check Answer

Explanation / Answer

Portfolio expected return

= 400* 71/1000 + 600*99/1000

= 87.8

Hence,

Portfolio expected return is $ 87.8

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