Maximum portfolio standard deviation


Dode Brinker owns a portfolio of two securities with the following expected returns, standard deviations, and weights:

Security               Expected return         Starndard Deviation                Weight

 

A                           10%                           20%                                     .35

B                            15                              25                                        .65

What correlation between the two securities produces the maximum portfolio standard deviation? What correlation between the two securities produces the minimum portfolio standard deviation. Show calculations.

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