What is the expected return and standard deviation of a portfolio consisting of $4200 invested in a risk-free asset with an 6.9-percent rate of return, and $1400 invested in a risky security with a 18.9-percent rate of return and a 23.9-percent standard deviation?
Expected Return = (4,200(0.069) + 1,400(0.189))/(4,200 + 1,400)
Expected Return = 9.90%
Standard deviation = (1,400/5,600)(0.239) as standard deviation of risk free asset is 0
Standard deviation = 5.98%
What is the expected return and standard deviation of a portfolio consisting of $4200 invested in...
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