HELP! i want to believe that this question is wrong
If the correlation between Pluto and Neptune is 0.25, determine the expected return and standard deviation of a portfolio that consists of 65% Pluto Corporation stock and 35% Neptune Corporation stock.
A)
10.3% expected return and 2.58% standard deviation.
B)
10.3% expected return and 16.05% standard deviation.
C)
10.0% expected return and 16.05% standard deviation.
Your answer: B was correct!
ERPort
= (WPluto)(ERPluto) + (WNeptune)(ERNeptune)
= (0.65)(0.11) + (0.35)(0.09) = 10.3%
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