Borrow money from bank to invest in stock market

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You borrow money from a bank to invest in the stock market. The mean return of your portfolio (X) is $1,759 with a standard deviation of $89 while the amount (Y) you have to pay back the bank including interest has a mean of $570 with a standard deviation of $21. Suppose the correlation coefficient between your portfolio return (X) and the amount (Y) you have to pay back the bank is 0.36. What is the variance of your net return (X-Y)?

Hint: Answer should be accurate to 1 decimal place.

Reference no: EM131562806

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