Home /
Expert Answers /
Finance /
assume-that-two-stocks-are-available-the-first-stock-stock-a-has-an-expected-return-of-20-and-a-pa935

Assume that two stocks are available. The first stock (Stock A) has an expected return of 20% and a standard deviation of 18%; the second stock (Stock B) has and expected return of 10% a standard deviation of 9%. If the correlation between the stocks is 0.20, What are the weight of Stock A (WA) and Weight of Stock B(WB) in the minimum-variance portfolio?

Standard deviation of stock A = ?a = 18 %

Standard deviation of stock B = ?b = 9 %

Correlation (a,b) = 0.20

We require this much data to calculate the weights of the minimum variance portfolio