Question

(a) What are the expected rates of return for Stocks X and Y (% in 2 d.p.)?

(b) What are the standard deviations of returns on Stocks X and Y (% in 2 d.p.)?
(c) Assume that of your $10,000 portfolio, you invest $9,000 in Stock X and $1,000 in Stock Y. What is the expected rate of return on your portfolio (% in 2 d.p.)?

Answer 1

We need historical return data to calculate the expected rates of return for Stocks X and Y and their standard deviations. Without this information, we cannot calculate the expected rate of return on your portfolio.

Step-by-step explanation:

To calculate the expected rates of return for Stocks X and Y, we need the historical returns for each stock. Without that information, we cannot provide the exact expected rates of return.

To calculate the standard deviations of returns, we also need historical return data. The standard deviation measures the volatility or risk of an investment.

The expected rate of return on your portfolio can be calculated by multiplying the weight of each stock by its expected rate of return and then summing the results. Since we don't have the expected rates of return for Stocks X and Y, we cannot calculate the expected rate of return on your portfolio.