0.15 0.05 001 -0.03 -0.01 0.09 the expected returns of the two stocks? the standard deviations of the retuns of the two stoc relation is 048, what is the expected retun and stan

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 6P: The market and Stock J have the following probability distributions: a. Calculate the expected rates...
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Stocks A and B have the following returns: (Click on the folowing icon a in order to copy its contents into a spreadsheet.)
Stock A
Stock B
0.08
0.06
0.15
0.05
0.04
0.05
0.01
-0.01
0.09
-0.03
a. What are the expected roturns of the two stocks?
b. What are the standard deviations of the returns of the two stocks?
c. If their correlation is 048, what is the expected return and standard deviation of a portfolio of 75% stock A and 25% stock B?
a. What are the expected returns of the two stocks?
The expected return for stock A is
(Round to three decimal places.)
Transcribed Image Text:Stocks A and B have the following returns: (Click on the folowing icon a in order to copy its contents into a spreadsheet.) Stock A Stock B 0.08 0.06 0.15 0.05 0.04 0.05 0.01 -0.01 0.09 -0.03 a. What are the expected roturns of the two stocks? b. What are the standard deviations of the returns of the two stocks? c. If their correlation is 048, what is the expected return and standard deviation of a portfolio of 75% stock A and 25% stock B? a. What are the expected returns of the two stocks? The expected return for stock A is (Round to three decimal places.)
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