Carson

herrgrunta wrote:
tonydaboiii wrote:
wtf all those numbers from question 1 come from? @@
The OP didn’t include all of the information that would normally be in a question, but I extrapolated them from his answer.
The full question would have noted that the first security has an 11% return and a 22% standard deviation and the second asset would have had a 9% return and a 13% standard deviation. Also (as was noted in the OP) the 2 assets had a 0.25 correlation.
Beyond this, his answer is just the calculation you would use for expected return and standard deviation of the 2 assets in the 65%/35% proportion discussed in the OP.
I really hope this makes sense for you now otherwise I would strongly advise a review of the Quant readings prior to Saturday!!!
Thanks, that makes much more sense. Hahah I think I’ll do fine on questions of this type, b/c after all portfolio valuations & risk assessment was one of the best courses I scored during undergrad. The calculations are pretty mechanical.