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drwalkinboner drwalkinboner
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8 months ago
Your portfolio consists of $100,000 invested in Stock X and $100,000 invested in Stock Y. Both stocks have an expected return of 18%, betas of 1.7, and standard deviations of 29%. The returns of the two stocks are independent, so the correlation coefficient between them is zero. Which statement best describes the characteristics of your two-stock portfolio?


▸

Your portfolio has a standard deviation greater than 29%, and its beta is equal to 1.7.



▸

Your portfolio has a beta equal to 1.7, and its expected return is 18%.



▸

Your portfolio has a standard deviation less than 29%, and its beta is greater than 1.7.



▸

Your portfolio has a beta greater than 1.7, and its expected return is greater than 18%.

Textbook 
Financial Management: Theory and Practice

Financial Management: Theory and Practice


Edition: 4th
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dm408dm408
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8 months ago
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