Problem Set 2 helpful hints

Problem Set 2 is available from the course website at http://fin4366.garven.com/spring2024/ps2.pdf; its due date is Tuesday, January 30.

Problem Set 2 consists of two problems. The first problem requires calculating expected value, standard deviation, and correlation, and using this information as inputs into determining expected returns and standard deviations for 2-asset portfolios. The second problem involves using the standard normal probability distribution to calculate the probabilities of earning various levels of return by investing in risky securities and portfolios; see pp. 13-19 of the http://fin4366.garven.com/spring2024/lecture4.pdf lecture note for coverage of that topic.

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