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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 $ 75 and the expected return for Y is $ 100. The variance for X is 1,575 and the variance for Y is 13,275. The covariance of X and Y is 3,065.

Complete parts? (a) through? (d).

a. Compute the portfolio expected return and portfolio risk if you put $ 300 in the corporate bond fund and $ 700 in the common stock fund. The portfolio expected return is

?(Type an integer or a? decimal.)

The portfolio risk is

?(Round to two decimal places as? needed.)

b. Compute the portfolio expected return and portfolio risk if you put $ 500 in each fund.The portfolio expected return is

?(Type an integer or a? decimal.)

The portfolio risk is

?(Round to two decimal places as? needed.)

c. Compute the portfolio expected return and portfolio risk if you put $600 in the corporate bond fund and $400 in the common stock fund.The portfolio expected return is

?(Type an integer or a? decimal.)

The portfolio risk is

?(Round to two decimal places as? needed.)

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92639141

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