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The Expected Return on MSFT Next Year Is 12% with a Standard

Question 54

Multiple Choice

The expected return on MSFT next year is 12% with a standard deviation of 20%.The expected return on AAPL next year is 24% with a standard deviation of 30%.The correlation between the two stocks is .6.If James makes equal investments in MSFT and AAPL,what is the expected return on his portfolio.


A) 21.45%
B) 25.00%
C) 4.60%
D) 15.00%

Correct Answer:

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