2-5 Summary statistics for returns on two stocks X and Y are listedbelow.Stock XStock YMean2.85%5.91%Variance0.0050000.006000The covariance of returns on stocks X and Y is 0.002800. Considera portfolio of 30% stock X and 70% stock Y.What is the variance of portfolio returns?Please round your answer to six decimal places.Note that the correct answer will be evaluated based on the full-precision result you would obtain using Excel.

Variance of a portfolio depicts the risk of the portfolio and is dependent upon standard deviation…

Summary statistics for returns on two stocks X and Y are listed below. Stock X Stock Y Mean 2.85% 5.91% Variance 0.005000 0.006000 The covariance of returns on stocks X and Y is 0.002800. Consider a portfolio of 30% stock X and 70% stock Y

Summary statistics for returns on two stocks X and Y are listed below. Stock X Stock Y Mean 2.85% 5.91% Variance 0.005000 0.006000 The covariance of returns on stocks X and Y is 0.002800. Consider a portfolio of 30% stock X and 70% stock Y

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

2-5

Summary statistics for returns on two stocks X and Y are listed
below.
Stock X
Stock Y
Mean
2.85%
5.91%
Variance
0.005000
0.006000
The covariance of returns on stocks X and Y is 0.002800. Consider
a portfolio of 30% stock X and 70% stock Y.
What is the variance of portfolio returns?
Please round your answer to six decimal places.
Note that the correct answer will be evaluated based on the full-
precision result you would obtain using Excel.

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