medium · Principles of Finance risk-return-portfolio
An investor owns a portfolio with 60% in Stock A (expected return 12%, σ = 20%) and 40% in Stock B (expected return 8%, σ = 15%).
If the correlation between A and B is 0, what is the expected return of the portfolio?
- 10.4%
- 9.6%
- 10.0%
- 18.0%
Sign up free to see the explanation and track your rank →
More Principles of Finance risk-return-portfolio practice
- Using the Capital Asset Pricing Model (CAPM), calculate the cost of equity for a firm with
- Using the Capital Asset Pricing Model (CAPM), what is the expected return of the stock?
- An investor holds a portfolio with a daily standard deviation of 1.5%. Using the parametri
- What is the expected return of the portfolio?
- In the context of the Fama-French Three-Factor Model, what does the 'HML' factor represent
- What is the expected return of the total portfolio?
- In market microstructure, what does 'Kyle's Lambda' measure?
- Based on Put-Call Parity, which of the following is true?