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Standard deviation of the return on security

Suppose the security I and security J have the following historical returns:

Year      kI    kJ
2001    20%   40%
2002    29      36
2003   -12     -25

Q1. What is the (arithmetic) average return on security I?

Q2. What is the standard deviation of the return on security I? (Use n-1 for the denominator.)

Q3. Suppose you invest 50% of your money in I and the rest in J to form a portfolio P. What is the average return on portfolio P?

Q4. What is the standard deviation of the return on portfolio P? (Use n-1 for the denominator.)

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Standard deviation of the return on security

Reference No:- TGS01450719

Have a Question? (oR Write a Review)

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Standard deviation of the return on security

Reference No:- TGS01450719

Recent Questions Asked Finance Basics

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