Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
Suppose General Motors stock has an expected return of
19%
and a volatility of
40%,
and Molson-Coors Brewing has an expected return of
11%
and a volatility of
30%.
If the two stocks are uncorrelated,a. What is the expected return and volatility of a portfolio consisting of
72%
General Motors stock and
28%
of Molson-Coors Brewing stock?b. Given your answer to
(a),
is investing all of your money in Molson-Coors stock an efficient portfolio of these two stocks?c. Is investing all of your money in General Motors an efficient portfolio of these two stocks?
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