Consider two assets (X and Y) with µx = 10%, µy = %3D 10%, o x=.16, o,=.25, and Cov(X,Y) = -.125. What is the expected return and variance of the portfolio having 70% invested in X and 30% invested in Y? Compare the risk and return of this portfolio with the risks and returns associated with investing everything in either X or Y. a. What is Pxy? b. What is the expected return of the portfolio |(.7K+.3v)? c. What is the standard deviation of the portfolio |(0,7x+.3Y)? d. How does the standard deviation of the portfolio |(0,7x+.3y) compare to the standard deviations of assets X and Y?
Consider two assets (X and Y) with µx = 10%, µy = %3D 10%, o x=.16, o,=.25, and Cov(X,Y) = -.125. What is the expected return and variance of the portfolio having 70% invested in X and 30% invested in Y? Compare the risk and return of this portfolio with the risks and returns associated with investing everything in either X or Y. a. What is Pxy? b. What is the expected return of the portfolio |(.7K+.3v)? c. What is the standard deviation of the portfolio |(0,7x+.3Y)? d. How does the standard deviation of the portfolio |(0,7x+.3y) compare to the standard deviations of assets X and Y?
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.1: Measures Of Center
Problem 9PPS
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