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QUESTION 10 You have a portfolio of investment which consists of Stock A with a return of A% and Stock B with a return of B%. Given the following average returns and standard deviations for both Stock A and Stock B, M(A) = 18%, M(B) = 51% s(A) = 1%, s(B) = 14% what is the absolute risk (standard deviation) of your portfolio assuming that the returns of Stock A and Stock B are uncorrelated? Hint: Notice that the return of your portfolio will be A+B and the Variance Sum Laws apply to the variances not standard deviations. Answer should be in % accurate up to 2 decimal places.

          QUESTION 10

You have a portfolio of investment which consists of Stock A with a return of A% and Stock B with a return of B%. Given the following average returns and standard deviations for both Stock A and Stock B,

M(A) = 18%, M(B) = 51%

s(A) = 1%, s(B) = 14%

what is the absolute risk (standard deviation) of your portfolio assuming that the returns of Stock A and Stock B are uncorrelated?

Hint: Notice that the return of your portfolio will be A+B and the Variance Sum Laws apply to the variances not standard deviations. Answer should be in % accurate up to 2 decimal places.

QUESTION 10

You have a portfolio of investment which consists of Stock A with a return of A% and Stock B with a return of B%. Given the following average returns and standard deviations for both Stock A and Stock B,

M(A) = 18%, M(B) = 51%

s(A) = 1%, s(B) = 14%

what is the absolute risk (standard deviation) of your portfolio assuming that the returns of Stock A and Stock B are uncorrelated?

Hint: Notice that the return of your portfolio will be A+B and the Variance Sum Laws apply to the variances not standard deviations. Answer should be in % accurate up to 2 decimal places.

Added by Paula C.

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