Asset A has an expected return of 5% and a standard deviation of 5%. Asset B has an expected return of 15% and a standard deviation of 25%. If you would like to form a portfolio that has an expected return of 20% and you can only invest in these two assets, what are the portfolio weights for doing so? Suppose that the correlation coefficient between asset A and asset B is zero, what is the standard deviation of the resulting portfolio?,Why is it 1.5 and not 0.15 on the standard deviation^2 calculation?
Paper#8513 | Written in 18-Jul-2015Price : $25