15.4.55 Question Help Suppose that you want to create a portfolio that consists

Question

15.4.55 Question Help Suppose that you want to create a portfolio that consists of a corporate bond fund, X, and a common stock fund, Y. For a $1,000 investment, the expected return for X is $71 and the expected return for Y is $99. The variance for X is 1,500 and the variance for Y is 11,650. The covanance of X and Y is 4,002 Complete parts (a) through (d) a. Compute the portfolio expected return and portfolio risk if you put $400 in the corporate bond fund and $600 in the common stock fund The portfolio expected return is $ 87.8 (Type an integer or a decimal) The portfolio risk is $ 79.72 (Round to two decimal places as needed.) b. Compute the portfollo expected return and portfolio risk f you put $500 in each fund The portfolio expected return is S (Type an integer or a decimal) Enter your answer in the answer box and then click Check Answer parts remaining

Explanation / Answer

b) Expected Return

= 500 * 71/1000 + 500 * 99/1000

= 85

Hence,

The portfolio expected return is $ 85

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.