What is the expected return of a portfolio of two risky assets if the expected return E(Ri), standard deviation (SDi), covariance (COVij), and asset weight (Wi) are as shown below? Asset (A) E(R₁) = 25% SDA = 18% W₁ = 0.75 COVAB = -0.0009 Select one: C A. 13.65% B. 20.0% C. 18.64% D. 22.5% Asset (B) E(R₂) = 15% SD₁ = 11% WB = 0.25
What is the expected return of a portfolio of two risky assets if the expected return E(Ri), standard deviation (SDi), covariance (COVij), and asset weight (Wi) are as shown below? Asset (A) E(R₁) = 25% SDA = 18% W₁ = 0.75 COVAB = -0.0009 Select one: C A. 13.65% B. 20.0% C. 18.64% D. 22.5% Asset (B) E(R₂) = 15% SD₁ = 11% WB = 0.25
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![What is the expected return of a portfolio of two risky assets if the expected return
E(Ri), standard deviation (SDi), covariance (COVij), and asset weight (Wi) are as
shown below?
Asset (A)
E(R₂) = 25%
SDA = 18%
WA = 0.75
COVA, B = -0.0009
Select one:
A.
13.65%
B.
20 U ODN
20.0%
C.
18.64%
D.
22.5%
Asset (B)
E(R₂) = 15%
SDB = 11%
WB = 0.25](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F55521067-0384-497f-95f8-f51a06d5dbdf%2F9bc5ad7a-c407-47f2-8634-04516a6d9188%2Fwdyunuc_processed.png&w=3840&q=75)
Transcribed Image Text:What is the expected return of a portfolio of two risky assets if the expected return
E(Ri), standard deviation (SDi), covariance (COVij), and asset weight (Wi) are as
shown below?
Asset (A)
E(R₂) = 25%
SDA = 18%
WA = 0.75
COVA, B = -0.0009
Select one:
A.
13.65%
B.
20 U ODN
20.0%
C.
18.64%
D.
22.5%
Asset (B)
E(R₂) = 15%
SDB = 11%
WB = 0.25
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