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Question
An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 18% and a standard deviation of return of 20%. Stock B has an expected return of 14% and a standard deviation of return of 5%. The correlation coefficient between the returns of A and B is .50. The risk-free rate of return is 10%. The expected return on the optimal risky portfolio is _________.
A. 14%
B. 15.6%
C. 16.4%
D. 18%
Answer
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Related questions
Q:
Which of the following does not approximate the performance of a buy-and-hold portfolio strategy?
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B. A price-weighted index
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Q:
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Q:
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Q:
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Q:
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Q:
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Q:
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D. The answer cannot be determined from the information given.