If you invest 2000 and 8000 in stock a and stock b


You have the following information for Stock A and Stock B:

Expected rate of return:

Stock A: .12

Stock B: .06

Standard deviation:

Stock A: .50

Stock B: .30

Correlation between the two stocks: .4

If you invest $2,000 and $8,000 in Stock A and Stock B respectively, what is the standard deviation of the portfolio?

a. .5110

b. .4799

c. .6013

d. .1131

e. .2946

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Financial Management: If you invest 2000 and 8000 in stock a and stock b
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