Portfolio Weights Assignment | Homework For You
June 8th, 2020
Suppose Intel’s stock has an expected return of 20.0% and a volatility of 3.0%, while Coca-Cola’s has an expected return of 7.0% and volatility of 3.0%. If these two stocks were perfectly negatively correlated (i.e., their correlation coefficient is – 1),
a. Calculate the portfolio weights that remove all risk.
b. If there are no arbitrage opportunities, what is the risk-free rate of interest in this economy?Get Finance homework help today