medium · Principles of Finance risk-return-portfolio
An investor constructs a portfolio with 60% in an equity fund (σ = 20%) and 40% in a bond fund (σ = 10%).
If the correlation between the two funds is 0.20, what is the portfolio standard deviation?
- 13.42%
- 16.00%
- 12.65%
- 15.00%
Sign up free to see the explanation and track your rank →
More Principles of Finance risk-return-portfolio practice
- In the context of the Fama-French Three-Factor Model, what does the 'HML' factor represent
- Using the Capital Asset Pricing Model (CAPM), calculate the cost of equity for a firm with
- What is the expected return of the portfolio?
- 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 total portfolio?
- If the correlation between A and B is 0, what is the expected return of the portfolio?
- In market microstructure, what does 'Kyle's Lambda' measure?