The standard deviation of s is 1240 and of k is 1420 the


a. A portfolio is invested 65% in asset S and 35% in asset K. S and K have a coefficent of correlation of 0.46. The standard deviation of S is 12.40% and of K is 14.20%. The expected return on S is 16% and on K is 18%. Calculate the portfolio's standard deviation.

b. A portfolio, P is equally invested in three assets: The risk-free asset and two risky assets A and B, whose returns are 21.80% and 15.60%, and whose betas are 1.824 and 1.086, respectively. If the expected return on the portfolio is 13.5%, calcuate the beta of portfolio, P.

c. In the preceding question, Calcuate the risk-free rate.

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Financial Management: The standard deviation of s is 1240 and of k is 1420 the
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