Given: E(R₁) = 0.13 E(R2) = 0.19 E(01) = 0.03 E(02) = 0.04 Calculate the expected returns and expected standard deviations of a two-stock portfolio in which Stock 1 has a weight of 40 percent under the conditions given below. Do not round intermediate calculations Round your answers for the expected returns of a two-stock portfolio to three decimal places and answers for expected standard deviations of a two-stock portfolio to four decimal places. a. 1,2 = 1.00 Expected return of a two-stock portfolio: 0.1280 0.0280 Expected standard deviation of a two-stock portfolio: b. 1,2 = 0.80 Expected return of a two-stock portfolio: 0.1280 0.0266 Expected standard deviation of a two-stock portfolio: c. 1,2 = 0.20 Expected return of a two-stock portfolio: Expected standard deviation of a two-stock portfolio: d. 1,2 = 0.00 Expected return of a two-stock portfolio: Expected standard deviation of a two-stock portfolio: e. 1,2 = -0.20 Expected return of a two-stock portfolio: Expected standard deviation of a two-stock portfolio: f. 1,2 = -0.80 Expected return of a two-stock portfolio:
Given: E(R₁) = 0.13 E(R2) = 0.19 E(01) = 0.03 E(02) = 0.04 Calculate the expected returns and expected standard deviations of a two-stock portfolio in which Stock 1 has a weight of 40 percent under the conditions given below. Do not round intermediate calculations Round your answers for the expected returns of a two-stock portfolio to three decimal places and answers for expected standard deviations of a two-stock portfolio to four decimal places. a. 1,2 = 1.00 Expected return of a two-stock portfolio: 0.1280 0.0280 Expected standard deviation of a two-stock portfolio: b. 1,2 = 0.80 Expected return of a two-stock portfolio: 0.1280 0.0266 Expected standard deviation of a two-stock portfolio: c. 1,2 = 0.20 Expected return of a two-stock portfolio: Expected standard deviation of a two-stock portfolio: d. 1,2 = 0.00 Expected return of a two-stock portfolio: Expected standard deviation of a two-stock portfolio: e. 1,2 = -0.20 Expected return of a two-stock portfolio: Expected standard deviation of a two-stock portfolio: f. 1,2 = -0.80 Expected return of a two-stock portfolio:
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
![Given:
E(R1)
= 0.13
E(R2) = 0.19
E(01) = 0.03
E(02) = 0.04
Calculate the expected returns and expected standard deviations of a two-stock portfolio in which Stock 1 has a weight of 40 percent under the conditions given below. Do not round intermediate calculations.
Round your answers for the expected returns of a two-stock portfolio to three decimal places and answers for expected standard deviations of a two-stock portfolio to four decimal places.
a. 1,2=1.00
Expected return of a two-stock portfolio:
0.1280
0.0280
Expected standard deviation of a two-stock portfolio:
b. 1,2 = 0.80
Expected return of a two-stock portfolio:
0.1280
0.0266
Expected standard deviation of a two-stock portfolio:
C. 1,2
0.20
Expected return of a two-stock portfolio:
Expected standard deviation of a two-stock portfolio:
d. 1,2 = 0.00
Expected return of a two-stock portfolio:
Expected standard deviation of a two-stock portfolio:
e. 1,2 = -0.20
Expected return of a two-stock portfolio:
Expected standard deviation of a two-stock portfolio:
f. 1,2 = -0.80
Expected return of a two-stock portfolio:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F80ff4993-098c-4f9e-b83e-0dabfed2bc0c%2F7b5a6de5-a6be-4a87-a9de-4bfc959c6ae9%2Fb000cj6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Given:
E(R1)
= 0.13
E(R2) = 0.19
E(01) = 0.03
E(02) = 0.04
Calculate the expected returns and expected standard deviations of a two-stock portfolio in which Stock 1 has a weight of 40 percent under the conditions given below. Do not round intermediate calculations.
Round your answers for the expected returns of a two-stock portfolio to three decimal places and answers for expected standard deviations of a two-stock portfolio to four decimal places.
a. 1,2=1.00
Expected return of a two-stock portfolio:
0.1280
0.0280
Expected standard deviation of a two-stock portfolio:
b. 1,2 = 0.80
Expected return of a two-stock portfolio:
0.1280
0.0266
Expected standard deviation of a two-stock portfolio:
C. 1,2
0.20
Expected return of a two-stock portfolio:
Expected standard deviation of a two-stock portfolio:
d. 1,2 = 0.00
Expected return of a two-stock portfolio:
Expected standard deviation of a two-stock portfolio:
e. 1,2 = -0.20
Expected return of a two-stock portfolio:
Expected standard deviation of a two-stock portfolio:
f. 1,2 = -0.80
Expected return of a two-stock portfolio:
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