Eric Popovich invests money in two stocks for the upcoming year. His investment is shown below: Stock LBJ: $10,000 Stock Duncan: $15,000 The correlation between LBJ and Duncan is 0.50. What is the expected return for the portfolio in the coming year?
Added by Erin W.
Step 1
- Assume the expected return for Stock LBJ is 10% and for Stock Duncan is 8%. - Weighted average return for Stock LBJ = $10,000 * 10% = $1,000 - Weighted average return for Stock Duncan = $15,000 * 8% = $1,200 Show more…
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