Risk factors of dating reltionship rules of the dating game show
A measure of the dispersion of a set of data from its mean.
Covariance is a measure of the degree to which returns on two risky assets move in tandem.
A positive covariance means that asset returns move together.
Stock B has an expected return of 15% and a weight of 70%. E(R) = (0.30)(0.20) (0.70)(0.15) = 6% 10.5% = 16.5% The expected return of the portfolio is 16.5%.
Now, let's build on our knowledge of expected returns with the concept of variance.
Portfolio variance = w*(150) 2*(0.5)*(0.5)*(80) = 87.5 37.5 40 = 165.