There are two stocks in your portfolio. Stock Weight E(r) Variance A 1/3 9% 0.0036 B...

There are two stocks in your portfolio. Stock Weight E(r) Variance A 1/3 9% 0.0036 B 2/3 15% 0.0081 a) Assume stock A and B are perfectly positively correlated, calculate the risk and return for your portfolio. b) Repeat (a), assume the correlation is 0. Why is the risk now lower than in (a)?

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jeff jeffy answered 1 year ago

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