Question

the stock market of country A has an expected return of 8 percent, and standard deviation of expected reutrn of 5 percent. The stock market of country B has an expected return of 16 percent and standard deviation of expected return of 10 percent. Find the global minimum variance portfolio

Answer 1

With stocks of 8% for A and 16% for B, The global minimum variance is given as 10.5 percent

How to solve for the variance

The expected return of the stock for the country a is given as 0.05

The Weight of this country's stock market WA  = 0.5

The expected return of the stock for the country a is given as 0.16

The Weight of this country's stock market Wb  = 0.5

Expected Return of the portfolio can be calculated as

= (WA x RA) + (WB * RB)

Expected Return of the portfolio = (0.5x 0.05 ) +(0.5*0.16)

= 0.105

= 10.5%

Read more on variance here:  brainly.com/question/10687815