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The Questions Relate to the Following Table of Information -What Is the Expected Return for a Portfolio with 60

Question 43

Multiple Choice

The questions relate to the following table of information:

  Stock X  Stock Y Expected Return  14 %  18 % Standard Deviation 40 %  54 % Beta 1.20  1.50 Correlation ( X ,Y)  = 0.25  \begin{array}{llcc} \text { } & \text { Stock X } &\text { Stock Y } \\ \text {Expected Return } & \text { 14 \% } & \text { 18 \% } \\ \text {Standard Deviation } & \text {40 \% } & \text { 54 \% }\\ \text {Beta } & \text {1.20 } & \text { 1.50 } \\ \text {Correlation ( X ,Y) = 0.25 } &\\ \text { } &\\\end{array}
-What is the expected return for a portfolio with 60% invested in X and 40% invested in Y?


A) 14.4%
B) 14.9%
C) 15.6%
D) 16.1%

Correct Answer:

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