Covariance between risky corp and the second stock

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You hold a portfolio consisting of 35% Risky Corp. stock and 65% of a second stock. You have estimated that Risky Corp. stock has an expected return of 16% and a standard deviation of 41%. Your portfolio has an expected return of 14% and a standard deviation of 33%. Use Solver to answer the following questions.

a. What is the expected return of the second stock?

b. Suppose that the second stock has a standard deviation of 34%. What is the covariance between Risky Corp and the second stock?

Reference no: EM131556438

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