Question
In: Finance
The expected return and standard deviation of a portfolio that is 50 percent invested in 3...
The expected return and standard deviation of a portfolio that is 50 percent invested in 3 Doors, Inc., and 50 percent invested in Down Co. are the following: 3 Doors, Inc. Down Co. Expected return, E(R) 14 % 11 % Standard deviation, σ 47 36 What is the standard deviation if the correlation is +1? 0? −1? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Correlation +1 % Correlation 0 % Correlation −1 %
Solutions
Expert Solution
Standard deviation of a portfolio is mathematically represented as:
a) When correlation = +1
Standard deviation = 41.50%
b) When correlation = 0
Standard deviation = 29.60%
c) When correlation = -1
Standard deviation = 5.50%
jeff jeffy answered 1 year agoRelated Solutions
The expected return and standard deviation of a portfolio that is 50 percent invested in 3...
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Standard deviation, σ
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What is the standard
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