Ebenezer Scrooge has invested 55% of his money in share A and the remainder in share B. He assesses their prospects as follows: A B Expected return (%) 15 19 Standard deviation (%) 22 24 Correlation...

Ebenezer Scrooge has invested 55% of his money in share A and the remainder in share B. He assesses their prospects as follows:

a.What are the expected return and standard deviation of returns on his portfolio?(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

b.How would your answer change if the correlation coefficient were 0 or –0.40?(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

c.Is Mr. Scrooge’s portfolio better or worse than one invested entirely in share A, or is it not possible to say?

multiple choice

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  Better

  
  
  
  


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  Worse

  
  
  
  


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  Not possible to say