At the beginning of 2020, you invest $3,000 in Microsoft (MSFT) stock and $5,000 in Proctor and Gamble (PG) stock.
Suppose you expect the monthly return to be 1.2% for MSTF and 0.5% for PG and the standard deviation of monthly returns to be 11.6% for MSTF and 6.5% for PG, and that the correlation of the returns on the two stock is 0.18.
– What are the expected monthly return on your portfolio and its standard deviation?
– Compare and discuss the return and standard deviation of the portfolio to the return and standard deviation of the two individual stocks. Get Finance homework help today