The expected return on big time toys is 9 and its standard, Ask an Expert

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The expected return on Big Time Toys is 9% and its standard deviation is 20%. The expected return on Chemical Industries is 8% and its standard deviation is 25%.

a. Suppose the correlation coefficient for the two stocks’ returns is .2. What are the expected return and standard deviation of a portfolio with 30% invested in Big Time Toys and the rest in Chemical Industries? (Round your answers to 1 decimal places.)

Portfolio's expected return %

Portfolio's standard deviation %

b. If the correlation coefficient is .7, recalculate the portfolio expected return and standard deviation, assuming the portfolio weights are unchanged. (Round your answers to 1 decimal places.)

Portfolio's expected return %

Portfolio's standard deviation

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92871193

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