The Stock Market of Country a Has an Expected Return

question 68

Essay

The stock market of country A has an expected return of 5%, and a standard deviation of expected return of 8%. The stock market of country B has an expected return of 15% and a standard deviation of expected return of 10%.
-Assume that the correlation of expected return between security A and B is 0.2.Calculate the standard deviation of expected return of a portfolio that has half of its money invested in A and half in B.

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Definitions:

Threatens

Communicating an intention to cause harm or disadvantage to someone in order to compel action or inaction.

Higher Wages

Increased compensation for employment, often reflecting a higher skill level requirement, more responsibilities, or adjustment to living costs.

Union Representative

An individual elected or appointed to represent and protect the interests of union members in discussions with employers.

Right to Strike

The legal right of workers to refuse to work as a form of protest against conditions or policies considered unfair by the workforce.