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Author Question: An investor is considering investing one-half of his wealth in Asset A and one-half in Asset B. He ... (Read 32 times)

vicky

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on: Apr 25, 2021
An investor is considering investing one-half of his wealth in Asset A and one-half in Asset B. He is not sure how the two assets are correlated. The correlation might be r = +1 or it might be r = -1. If it is r = + 1, then the portfolio standard deviation is 15%. Calculate the portfolio standard deviation if the correlation is r = -1. What is the difference between the standard deviations of Scenario 1 and Scenario 2? (Scenario 1 - Scenario 2)

​ASSET AASSET AASSET BASSET BCorrelation
ScenarioExpected ReturnStandard DeviationExpected ReturnStandard DeviationCorrelation of A and B
110%20%5%10%+1
210%20%5%10%-1

◦ 2.5%
◦ 5.0%
◦ 7.5%
◦ 10.0%
◦ 15.0%
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
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Marked as best answer by vicky on Apr 25, 2021

wilsonbho

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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vicky

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Reply 2 on: Apr 25, 2021
Gracias!

AmberC1996

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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