You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent in Bel

Question

1. You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent in Bella Co., and 30 percent in Edward Resources. What is the expected return of your portfolio if Jacob, Bella, and Edward have expected returns of 0.09, 0.16, and 0.05, respectfully?
2. The covariance of the returns between Willow Stock and Sky Diamond Stock is 0.0840. the variance of Willow is 0.2570, and the variance of Sky Diamond is 0.1370. what is the correlation coefficient between the returns of the two stocks
3. Assume the following facts about a firm

Explanation / Answer

1. The port folio return= (0.40 *9) + (0.30*16) + (0.40*5)

= 3.6 + 4.8+ 2

=10.4%

the reuturn of the port folio = 10.4%

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