The Stock Market of Country a Has an Expected Return

question 20

Essay

The stock market of country A has an expected return of 5%, and standard deviation of expected return of 8%. The stock market of country B has an expected return of 15% and standard deviation of expected return of 10%.
-Assume that the correlation of expected return between A and B is negative 1.Calculate the standard deviation of expected return of the portfolio in the last question.

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Definitions:

Financial Statements

Reports that summarize the financial performance, position, and cash flows of a business over a specific period.

Investor

An individual or entity that allocates capital with the expectation of receiving financial returns.

Investee

denotes an entity in which another entity holds an interest, typically through investment.

Subsidiary

A company that is controlled by another company, typically referred to as the parent company, through ownership of more than half of its voting stock.