Stock x and stock z both have an expected return of 10 the


Stock X and Stock Z both have an expected return of 10%. The standard deviation of the expected return is 8% for Stock X, and 12% for Stock Z. Assume that these are the only two stocks available in a hypothetical world. A. Assume that the correlation between the returns of the two stocks is +1. • What is the expected return and standard deviation of a portfolio containing 50% X and 50% Z • What is the optimal amount of Stock Z for an investor to hold in a portfolio (if the correlation is +1)?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Stock x and stock z both have an expected return of 10 the
Reference No:- TGS01452461

Expected delivery within 24 Hours